Mortgage rates have remained low in Orange County through the first two months of 2010. As the deadline approaches for the Federal Reserves Mortgage Backed Securities purchase program, the expectation is that interest rates will increase. But other factors have contributed to keep rates low, including the financial crisis in Greece, which has created demand for the safety of United States treasuries.
There are some experts, such as Bill Gross, portfolio manager for PIMCO’s Total Return Fund, and a bond market guru if there ever was one, who believe the government should remain involved in purchasing Mortgage Backed Securities.
Orange County FHA and VA Rates
FHA and VA interest rates continue to be in the 5% range. Low rates allow Orange County first time home buyers to qualify for a bigger loan, which also means a more expensive home. For example, a $300,000 loan at 5% would have principal and interest payment of $1,610. At 5.5%, the payment is $92 higher at $1,703. In terms of loan amount, the payment difference is equal to a $17,000. By this, I mean that if a home buyer wants to have a $1,610 principal and interest payment but interest rates go up .5%, then the buyer would need to go with a loan amount of approximately $283,000 rather than $300,000.
With interest rates so low, now is the time to act to by a home. The First Time Buyer Tax Credit of $8,000 is set to expire soon. To qualify for the tax credit, a buyer must have a home under contract by April 30, 2010.
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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