FHA mortgage rates in Orange County have remained low so far in 2010. With rates ranging in the 5% to 5.5% range, depending on loan amount, FICO, and term of the loan, this is a great time to buy a home or take advantage of the FHA Streamline Refinance program.
High Balance FHA Mortgage Rates
Orange County is considered a high cost county as compared to other areas of the United States. Actually, Orange County is high cost even compared to some nearby counties such as San Bernardino and Riverside. Because of this “high cost” status, FHA allows loan balances to be as high as $729,750. Same goes for Los Angeles county. FHA even allows the same minimum down payment of 3.5% down on these high loan amounts as is allowed at the lower balances. There is an interest rate difference once a loan balance is higher than $417,000. Typically the interest rate is approximately .25% higher when the loan balance is higher than $417,000. For example, a loan amount of $417,000, based on current market, would have a note rate of 5% (5.645% APR) for 1 point. A Loan balance of $500,000 (or between $417,000 to $729,750) would currently have a note rate of 5.25% (5.845% APR) at 1 point. This is still a great deal, especially considering the fact that the down payment need only be 3.5% of the property value.
Orange County FHA Streamline Refinance
The FHA Streamline refinance is one of the biggest advantages of the FHA program. If rates drop from the time when an FHA borrower purchases a home, they are able to refinance to a lower rate without even needing an appraisal. Also, unless the borrower wants to pay fees out of pocket, most FHA Streamlines will be quoted based on Zero Closing Costs. With no closing costs, the much of of the guess work is taken out of the decision process.
Most analysts still feel that mortgage rates will increase later in 2010, which means if there are any California FHA borrowers out there with current interest rates of 6% or higher, they should consider checking into whether an FHA Streamline refinance makes sense for them. There are a few changes to FHA coming in the next few months that add some urgency to moving forward with a Streamline Refinance, including and increase in the Upfront Mortgage Insurance Premium from 1.5% for FHA Streamlines to 2.25%.
Now is the time to check into an FHA Streamline for Orange County FHA borrowers.
Authored by Tim Storm, an Orange County, CA Loan Officer – Please contact me for more information about an Orange County, CA home loan. 877-786-4243 x 7.
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