California is one of the most
popular areas of the country to live in. And
California's property is an important factor that
contributes maximum to the economic growth of the
country. While talking about California mortgage, it is
necessary to mention that California is a place where
the home loan interest rates are undergoing constant
change.
The important part of the California
mortgage is its mortgage lenders, which includes banks,
savings, loan associations and mortgage brokers. For
getting a mortgage in California, the
mortgage-qualifying ratio is being followed. This ratio
defines the amount of money that should be spent on the
mortgage. However, the California mortgage market today
is considered to position itself at the best juncture as
compared to other mortgage markets. The reason: mortgage
awareness, initiative by the California Mortgage
Association meant for providing legal resources,
legislative advocacy, and availability of different
programmes. The sole aim of the California Mortgage
Association is:
- Promoting the activities of
mortgage lenders involved in the
business.
- Improving the standard in the
mortgage business.
- Develops education with the
people.
- Creates an atmosphere of
cooperation.
Basically, there are many variations
regarding the type of mortgages, which contributes to
the overall California mortgage market. Based on the
interest rate structure the types of mortgage
are:
- Fixed rate mortgage
- Adjustable
rate mortgage
- Interest only
mortgage
Based on the purpose for which the
loan is being taken, following are the types of
California mortgage available in the
market:
- Home Loans
- Home Equity
Loans
- Reverse Mortgage
Loans
- Refinance Mortgage loans
- Debt
Consolidation Loans
Among the various types of mortgages,
adjustable mortgage rates are the most popular
especially among the investment property owners. These
resources are dedicated to existing California
homeowners as well as the first time California
homebuyers that need a mortgage.
Switching over to the current trends of
the California mortgage market following is the table
furnishing the present average rates:
15 Year FRM 6.50%
30 Year
FRM 6.95%
1 Year ARM 6.64%
The long-term California
Mortgage rates i.e. 30-year FRM rates have gone up to
the highest mark since the nationally recorded rate in
October 2006. 15 year fixed rate loans have been on an
upward trend compared to that of a year ago when the
national average rate was 5.81%. These rate hikes on the
long-term mortgages are primarily due to the increasing
trend of interest rate on 10 year Treasury note since
the final quarter of 2006. However, interest rates on
both 30 year and 15-year loans have started taking a
downward turn again.
Economically the California mortgage
market situation at present has strong economic growth
and moderate inflation over the final quarter of 2006
which contributed to a softer market pattern in 2007.
The Federal Reserve has held steady with the Fed Funds
rate at which banks offer overnight loans to each other.
It continues to do so in order to curb inflation and
foster economic growth. The prime rate, that is the
rates offered by mortgage companies to corporations also
remains unchanged as it is based upon the Fed Fund
rate.
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