Over the past 30 days we have seen mortgage interest rates increase quickly. Orange County home owners and home buyers who had been expecting a 30 year fixed rate in the low 4′s are now finding rates in the upper 4′s to 5%. Still, rates are near historic lows.
FHA and VA Rates for Orange County Homebuyers
FHA and VA interest rates had been sitting at 4% to 4.25%, depending on a borrowers FICO score and loan amount. (Loan’s over $417,000 tend to have a higher rate – “Jumbo” or “high balance” loan amounts) Now, FHA rates are at 4.75%, with an APR of 5.621. This is still a very low rate, especially considering the FHA loan program only requires a 3.5% down payment.
Will Interest Rates Continue to Increase?
The Fed is doing everything they can to keep mortgage rates low, but there are still outside forces which are having a big effect in rates and the bond market. Issues in Europe (Ireland, Greece, Portugal etc), China’s inflation, favorable economic and jobs reports are all factors in what is happening with rates right now. The bond market picked up 800 basis point from April to the beginning of November. So far, since mid November, we have lost 400 basis point. So we’ve only lost half of what we gained since April. Depending on how you look at it, we either have another 400 basis points to lose, means rates will go up, or possibly rate will stablize as we head into 2011.
Home Affordability is High in the OC
Despite the increase in rates, home affordability is higher right now than in the past 30 years. A combination of low rates and low home prices and has created a situation where a mortgage payment compares favorably to a rent payment. The first step in the home buying process is to talk with a local Mortgage Expert. The loan officer whould be able to prepared a “Rent Versus Own” analysis, along with detailed and customized loan scenarios.
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.
Contact us for your Orange County Home Loan:
Call our office today and see how we can help you and your family. Ask for your Free First Time Home Buyer Report.
877.786.4243 x 7 | tstorm (at) ochomebuyerloans.com
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