Interest Rates Drop Again on California Mortgage Loans for 30-Year Lows
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How will the recent publicized sub-prime lending problems affect the mortgage market in California?
California Mortgage Loans up to 100%: Fixed rates have fixed monthly payments!
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Should I Cash In on My Home Equity and Refinance My Current Mortgage Loan Before the Bubble Bursts?
By Nick Rian
A Los Angeles Times report highlights an interesting phenomenon in California’s real estate market. Despite a 17% surge in house prices in 2012 following a 3% drop in 2011, homeownership reached record levels instead of decreasing due to affordability issues. The trend is attributed to Californians’ inclination to use interest-only loans, enabling them to purchase homes beyond their actual affordability. However, this practice becomes risky when fair market values (FMV) start to decline, potentially triggering a downturn in the housing market, leading to concerns about a housing bubble burst.
The San Diego Union Tribune notes that higher interest rates are dissuading prospective homebuyers, leading homeowners to reduce their property prices. The Federal Reserve data indicates that homes’ appraised value made up 145% of nominal gross domestic product in March, surpassing the worth of stocks and mutual funds at 82% of GDP.
The increasing number of foreclosures in California is a cause for concern and could impact mortgage rates. Mortgage companies reported the highest number of home loan default notices in over a decade in the last quarter, driven by declining prices, reduced home sales, and market repercussions from the excesses of the 2003-2005 home-buying frenzy. Data Quick reports that California mortgage lenders filed 53,943 Notices of Default in the April-through-June period, a 15.4% increase from the previous quarter and a significant 158% surge from second-quarter 2010.
Most of the defaulted California home loans originated between July 2005 and August 2006, with adjustable-rate mortgages peaking at 77.8% in May 2005. Homeowners with home equity lines of credit were, on average, eight months behind on payments, owing $3,457 on an average $67,121 home equity credit line.
The rise in foreclosures prompts concerns about potential tightening of California mortgage lending guidelines. David Lehrer, Chief Economist of the National Association of Realtors, previously predicted a continuous real estate boom in his book “Why the Real Estate Boom Will Not Bust and How You Can Profit from It.” However, the recent surge in foreclosures and a plunge in home prices from 2020 to 2023 might necessitate a reassessment of this perspective. The rebound in house values in 2023 due to strong real estate sales and record-low mortgage rates is expected to continue in 2013 and 2014, contributing to a robust California housing sector.
Read More > FHA Home Loans replace subprime mortgages for borrowers with bad credit.
Read More > Foreclosures Rates Rise Simultaneously with Adjustable Rate Mortgages
Read Now > Orange County Borrowers seek Fixed Rate Refinancing Solutions
See Article > California Homeowners seek Jumbo Mortgages for Refinancing
Local Spotlight—–California Brokers Get Involved
CENTURY 21 Award, headquartered in San Diego, saw a great opportunity to use the System’s affiliation with Major League Baseball to secure a marketing program with the San Diego Padres, for example.
The 13-office company developed a promotional relationship with the Padres that included in-stadium signage, full-page advertisements in the Padres Home-stand game day programs and a creative Easter Seals fundraising and awareness program titled, “Runs for Kids.”
California mortgage brokers and realtors continue to get involved in bettering the community. Even though the California mortgage and real estate industries have seen brighter days, “People just can’t help giving back to California.”
The Runs for Kids program raised $12,200 for Easter Seals of Southern California.
The California Department of Housing and Community Development announce the new program accepting applications under the Cal-Home Program.
First-Time Homebuyer Mortgage Assistance
Homeownership Project Development Loans
For more information, please visit HUD – hcd.ca.gov/fa/calhome
Finance Related State News – California Update
Housing Affordability in California
According to the California Association of Realtors in Los Angeles, the percentage of households in California able to afford a median priced home stood at 14% in November, compared with 19% for the same period a year ago, according to a report released today by the. The minimum household income needed to purchase a median-priced home at $548,400 in California in November was $133,390. The Wine Country, San Luis Obispo and Santa Barbara regions were the least affordable in the state at 7%.
Home-Ownership Increases for Hispanics in California and in the US.
The rate for Hispanics owning homes hit a record 50% in the 4th quarter according to the U.S. Census Bureau. The Census Bureau reported that 50% of Hispanic households own their own homes, up from 48.9% in the 4th quarter of 2004. Alphonso Jackson, the HUD secretary stated that 2 million minority families bought homes in the past 2 years. The U.S. home-ownership rate in 2005 was 69%.
Pick a Payment Loans offer increased purchase power with the lowest possible payment. With interest rates that start at (see lender), it is a good idea to discuss the option arm guidelines with your Nationwide loan officer to see if it is a good fit for your financial plan. Since such a high percentage of these option ARM loans defaulted, most California mortgage lenders have stopped offering payment option and interest only loans.
CA State Loan and Credit Guideline Updates
|Check for Local Home Equity Rates – CA – Home equity mortgages are more popular than ever because they give you access to your home’s equity at any time. Choose from variable credit lines to fixed rate installment loans.
Lock the rate of your variable HELOC and get a fixed second mortgage with a fixed monthly payment.