California Mortgage Rates Lowest In Years!

We offer the lowest California mortgage rates.  Mortgage loan rates can be affected by many things and therefore fluctuate, sometimes on a daily basis. It pays to know a little about how mortgage rates are determined.   Although, for the average borrower, how the loan rates are actually isn’t critical information. Having a little knowledge of the economic factors that cause rates to change can help you calculate the best time to apply to get the best rates possible. Use our free California Mortgage Rate calculator to see if you qualify for a refinance loan. Get a free home loan rate quote, fill out the form on this page.

Generally, when the Federal Reserve raises or lowers interest rates it will have an impact on rates for fixed rate home loans. When the Federal Funds rate decreases, the population spends more which can, in some circumstances, increase inflation. Loan rates are a longer term debt with rates that are affected by worries about inflation and other indicators such as job growth.

So in analyzing current mortgage rates in California it is more accurate to say that these rates are indirectly affected by the Federal Reserve Board, and more directly affected by what happens in the public markets. The market sets the home mortgage California rates, and then a margin is added to that rate to determine your final home mortgage interest rate.

When Should You ‘Lock In’ Your  California Mortgage Rates?

As previously mentioned,  California mortgage rates fluctuate on a daily basis. Lenders can ‘lock in’ a particular interest rate for a mortgage loan but the longer term a lender locks in the rate for, the higher the risks is that interest rates will rise. So, if you want a longer interest rate guarantee you will typically need to pay the lender what is referred to as points.

If interest rates appear to be rising, it makes sense to lock in a lower California mortgage interest rate. However, if the interest rates have been dropping, it would make sense to wait and use a shorter period of time to lock in your interest rate, thereby saving you money over the life of your loan.

The up front points charged by a lender can be for several reasons. One is to buy a lower interest rate. Each point equals one percentage point of the total loan value. For example if your  California mortgage loan is for $100,000 and you pay one point, your charge would be $1,000. This point payment would ensure you get  lower California mortgage rates over the life of the loan which saves you money. This might be a good option if you plan on staying in the home for a period of time. On the other hand, if this will be for a short term paying points may not be cost effective to pay points for your loan.

A Bad Credit Score Can Affect Your  California Mortgage Rates

If you have a less than perfect credit score that my put you in the category of a high credit risk which means you will only be eligible for a loan with a higher interest rate. Do not despair, there are loans available even if your credit score is not good. And, spending a little time to clean up your credit score will typically be time well spent.

Another factor in determining your credit status, and therefore you interest rate, is your debt to income ratio. Debt to income ratio is calculated by comparing your debt obligations against your current income. The higher your debt to income ratio the higher credit risk score which could mean higher  California mortgage rates.

The amount you need to borrow versus the value of the home you want to purchase is referred to as the loan to value ratio. The more money you have for a down payment or the more equity in a refinance situation, the less risk for the new lender and the better interest rate for you.

One key factor in getting the best interest rates is being prepared to live in the home. Lenders typically offer lower interest rates for ‘owner occupied’  California mortgage loans than they do for rental units.

Keep these factors in mind when you apply for your California mortgage loan and you will be well on the road to obtaining low California mortgage rates.