Orange County first time home buyers should continue to receive low mortgage interest rates during the first quarter of 2011. After experiencing historically low rates in 2010, with FHA rates dropping into the 4.25% range, FHA and VA interest rates are currently in the 4.75% (5.428 APR) range. There are several factors that have contributed to the recent increase, but still, rates are very low right loan now.

FHA Loan Programs | 30 year fixed and 5 year Adjustable Rate Mortgage (ARM)

While most Orange County first time buyers choose the FHA 30 year fixed program, some will choose the FHA 5 year fixed, depending on their long term goals with the home they buy. While rates ranging from 4.75% (5.428 APR) for a 30 year fixed are very low, the FHA 5 year adjustable rate mortgage offers rates in the 3.75% (3.594 APR) range. With this program the rate is fixed for the initial 5 years. After the end of the 60th month the rate begins adjusting on a annual basis. The adjustment is based on a fixed margin, typically between 2.25% and 2.75% over the 1 Year T Bill index. For example, an Orange County FHA borrower who got a 5 year ARM 60 months ago would be getting ready to have their first adjustment. They could anticipate their rate going down, at least for the next year. Let’s say their current rate was 4.5%. The current 1 Year T Bill Index is .3%. Adding 2.25% to .3% gives us a current “fully indexed rate” of only 2.55%. There is an adjustment cap on FHA loans of 1%. This means that the FHA borrower would receive a new rate of 3.5% (1% less than their current rate, but not all the way down to the fully indexed rate because of 1% adjustment cap.) There is risk, since nobody knows right now where rates will be in 5 years. And with 30 year fixed rates so low, most Orange County First Time Buyers should choose a 30 year fixed. But if a buyer fully expects to be out of their home within 5 years, then this program may be worth a 2nd look.

FHA 15 year Fixed

The FHA 15 year fixed is a great program, for those who can afford the higher payment that comes with it. The big advantage of a 15 year fixed is that it pays the home off in only 15 years instead of 30 years. But another big advantage, and something most people don’t realize, is that FHA does not require monthly Mortgage Insurance on the 15 year fixed program if the loan is equal to 90% of the property value or less. That saves quite a bit. For example, the standard FHA Mortgage Insurance Premium for loans over 95% loan to value is .9% (on a 30 year fixed). On a $300,000 loan, the monthly FHA mortgage insurance would approximately be $225. ($300,000 * .9%/12 = $225). On the 15 year fixed, the monthly Mortgage Insurance would be $0. Plus, the interest rate is typically .375% to .5% lower than a 30 year fixed. But the accelerated principle pay down does push the payment higher. The payment is approximately 30% higher on the 15 year fixed after taking into consideration mortgage insurance. (On the $300,000 example, that a difference of $2,256 versus $1,789). So for someone who can afford a payment $500 higher, they could save 15 years of payments on the back end of their mortgage. Not a bad plan or the right person.

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.

www.OCFHALoans.com

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

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.

www.OCFHALoans.com

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

VA home loan mortgage interest rates are at all time lows for California Veterans. The VA loan program provides a way for California active military and veterans to purchase a home with $0 down payment. The 100% financing limit varies from county to county. Some California counties are known as “high cost” and allow for 100% financing up to a purchase price of $593,750. Orange County and Los Angeles County both have these high VA loan limits. Not only does the VA loan program offer 100% financing, but it also does not have mortgage insurance, like most other “high loan to value” loan programs. Now, to make the VA program even better, VA interest rates for California home buyers are lower than ever before.

California VA loans $417,000 and Under

30 year fixed interest rates for VA loan amounts $417,000 and less are currently in the 4.25% to 4.5% range, depending on loan fees required by the lender. Interest rates can vary depending on the borrowers FICO score. For example, while most lenders will allow FICO scores as low 620, interest rates for low FICO scores will be higher. Which makes it very important to know your FICO score before making an offer on a home.

California VA loans $417,001 and Up

For those counties that allow 100% financing over $417,000, the interest rate is a little higher. Currently VA interest rates for “Jumbo VA loans” is in the 4.5% to 4.75% range. Pricing can change even more dramatically for Jumbo VA loans if a FICO score is low. Also, reserves (money in the bank) can help a Veteran get the best pricing possible.

What is the Difference Between VA Interest Rates and Cal-Vet Interest Rates

The Cal-Vet loan program can be great at times. But it can also be not so great at other times. This is one of those times. Interest rates for the Cal-Vet program are based on Bond financing.  Cal-Vet interest rates are currently in the 5.75% to 6.2% range, according their the Cal-Vet website. This is 1.5% to 2% higher than what is available on the VA loan program for California veterans and active military.

Interest rates for the VA loan program can move on a daily basis. For the latest update it is important to talk to a California VA loan expert.

Authored by Tim Storm, an Orange County, CA  VA Loan Officer – Please contact my office at Trust One Mortgage Corporation for more information about an Orange County, CA home loan.  877-786-4243 x 7.

www.OCFHALoans.com

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

*Trust One Mortgage Corporation is licensed and supervised by the California Department of Real Estate (“DRE”), License # 01087829

Mortgage interest rates are lower for Orange County home owners than ever before. But how long will this last?

According to Freddie Mac, mortgage rates are at all time low’s. “Freddie Mac said on Thursday that the average rate for 30-year fixed loans sank to 4.69%, from 4.75% last week. That’s the lowest since Freddie Mac began tracking rates in 1971. The previous record of 4.71 was set in December. Rates for 15 year and 5-year mortgages also hit all time lows.”

What is Driving Interest Rates Down for Orange County Home Owners?

A combination of European and worldwide financial instability has lead to a stronger dollar. Inflation has remained in check as well. Bad news is good for interest rates. Fears of a double dip recession and now even the possibility of the Fed beginning another round of Bond purchases are also factoring in lower mortgage rates.

Great Refinance Opportunities for Orange County Home Owners

This has provided Orange County home owners a great opportunity to lower their mortgage payments by refinancing. Even for those Orange County home owners whose homes have depreciated, they can still possibly take advantage of either Fannie Mae’s Home Affordable Refinance for loan to values up to 105%, Freddie Mac’s 105% refinance program, or, for those with an FHA loan, the FHA Streamline Refinance does not require an appraisal at all.

Orange County Homeowners Refinancing with Zero Costs

As interest rates have dropped, many Orange County home owners have taken advantage of a Zero Cost Refinance. A Zero Cost refinance typically will have a slightly higher interest rate, but all nonrecurring closing costs (lender fees, escrow, title, recording, notary, etc) are credited by the lender. This results in an immediate “breakeven” on the refinance.

The first step is to check with a local Orange County home loan company. Talk with one of their experienced loan officers who should be able to prepare custom loan scenarios based on your individual situation. There are many options, including the fully amortizing 15 year fixed.

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.

www.OCFHALoans.com

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

Orange County homeowners and homebuyers have noticed over the past 12 months that rates are constantly moving up and down. Just when you think interest rates are going to stay low, an announcement by the Fed, or some event, either good or bad, will push mortgage rates either up or down. It seems that no matter how many analysts you listen to, nobody can really know for sure where rates will be from one day to the next. But there is a science to it, and there are ways to educate yourself to made a wise decision on when to lock a rate. Below is a great video which explains how mortgage rates are determined.

Orange County Mortgage Rates Have Remained Low

Despite the common thinking that mortgage rates would go up after the Fed stopped purchasing Mortgage Backed Securities, the opposite has happened. Rates, after a slight uptick, have improved.  The reasons for the improvement have much to do with what is happening around the world. The struggling European economies, specifically Greece and Portugal, have helped to weaken the Euro and strengthen the dollar. This is helped to improve mortgage rates. Also, conflicts in Israel and Korea are helping to keep rates low. And of course China has continued to purchase our Mortgage Backed Securities. All these things have combined to keep rates low. Just remember, bad news is generally good news for mortgage rates. Hurricanes (not necessarily in Orange County), earthquakes (there we go), floods, and wars are all things that actually can result in lower mortgage rates.

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.

www.OCFHALoans.com

Contact us for your Orange County Mortgage:

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

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.

www.OCFHALoans.com

Contact us for your Orange County Mortgage:

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

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.

www.OCFHALoans.com

Contact us for your Orange County Mortgage:

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