Scott Storace - Branch Manager, 100 Pacifica Drive Ste. 140, Irvine CA 92618 NMLS #226339 949.973.0141

"From the minute you call me to the minute we close, I have your back. No hassles, no banker’s hours & quick response times." - Scott Storace

  • Home Loans up to $3,000,000
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Interest Rates in Orange County, CA: Why Wait?

30 Year Interest Rate Chart

Great Rates...Why Wait?

 
Interest rates for a 30 year mortgage averaged 3.92% in the first quarter of 2012. Since 1971, Freddie Mac has surveyed a variety of lenders nationwide. From their surveys they establish the average interest rates and points that lenders are charging. Over this time period the average interest rate is 8.32%. The difference between today’s average rate and the historical average is 4.40%. And a 4.40% savings equates to huge financial savings for Orange County homeowners.
 
Keep in mind, that these interest rates are based upon a specific scenario. That scenario looks like this. The homeowner is purchasing a home with 20% down and a loan amount at or below $417,000. This is a primary, single family residence home and the resident has a 740+ credit score. Basically, we’re talking about A+ borrowers with no blemishes.
 
With that said, every loan is different. It’s unique to every Orange County resident. But the point is this: Interest rates are phenomenal and there is a great opportunity to save money.
 
First time homebuyers should be in heaven. Home prices are down 30-50% from their peaks in most Orange County cities. Interest rates are near historic lows. This is a perfect buying combination. Take a look at the scenario below.
 
 
Now this is an extreme example but it makes an extreme impression. Now is the time to lock in savings. It can be a costly mistake if you wait for home prices to decline and interest rates increase during that time. A 1.000%  increase in rates adds 11% to your monthly payment. In addition, according to Steven Thomas’ Reports on Housing, the listing inventory in Orange County is at the lowest level since June 2005. Distressed properties still account for 23% fo the listings in Orange County, CA but the inventory is at the lowest level since September 2007. Plus, there’s a lot of demand for the limited supply of homes. Demand is at the highest levels since June 2005. There are multiple offers on many homes and this has put upward pressure on prices. So all the signs are pointing to a real estate market that is heating up. For the homebuyers, this should be an additional incentive to find a home now.
 
Already an Orange County homeowner? If your interest rate is 5.000% or greater then you should seriously consider refinancing your home loan. A 1.000% decrease in rate will also cut your payment by 11%. Using a loan amount of $400,000 that equates to a $237 reduction in your monthly payment. That’s $2,844 each and every year you remain in your home!
 
“But I’ve lost the equity I once had in my home!” So have many others. Hope is not lost. There are a number of conventional and governement home refinance loans that are not equity based. Check out the HARP 2.0 program for conventional loans as well as FHA streamline and VA streamline refinance loans. Interest rates for these programs are a bit higher. However, many Orange County residents are still saving considerable amounts of money with these programs.
 
So with interest rates this low, why wait? If you’ve been considering refinancing or purchasing, I strongly encourage you to do it soon. The housing market is heating up. Interest rates will increase. The only questions are when interest rates will begin their climb and how quickly will they go up.
 
Scott Storace

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