When we say California Home Mortgage we are referring to mortgage money used to purchase real estate. There is a difference between the loans that lenders will make for a California Home Mortgage and a California Refinance Home Loan.
For example, while it is still possible to get 95% and even 97% financing for a purchase it is tough to get even 90% loan-to-value on a refinance.
Briefly, there are 2 types of California Home Mortgage Loans - fixed and adjustable. Fixed rates are most common now, but from time to time adjustables make up a sizable portion the lending activity.
A 30 year fixed California Home Mortgage has level payments for 30 years and at the end of 30 years you owe zero. The 30 year amortization starts out with almost all the payment going to interest and a few dollars toward principal Gradually, month by month the amount of principal paid gets bigger and the interest portion gets smaller.
If you make a lump sum payment on this California Home Mortgage your minimum monthly payment is still the same but the term or length of time you pay is reduced.
Adjustable mortgages have a rate that adjusts according to market conditions. There are many types of adjustable mortgages, but they all have one thing in common - the rate and the payment can change.
One variety of adjustable California Home Mortgage Loan is the 5/1 arm. This one features a fixed rate and payment for 5 years, then becomes adjustable.
Adjustables sometimes get a bad rap from certain writers but there are many good reasons to choose an adjustable. Here are just a few:
- The rate is based on "short term" money which is usually less than "long term" money.
- If you make a lump sum payment your minimum monthly payment goes down.
- The underwriting guidelines may be more flexible.
Unlike gas prices, your California Home Mortgage Loan is priced about the same as mortgages anywhere in the USA. While there may be some small differences of an eighth to a quarter percent on any given day, you can be sure your California Home Mortgage can be priced well.
Pricing is an issue with everyone, as evidenced by all the Internet users searching for low mortgage rates, but the pricing for your California Home Mortgage is determined by your credit profile, not your Internet search ability. Each lender has slightly different pricing structures, but in general, the less-than-perfect your credit profile is, the less-than-perfect your rate will be.
When I first started in the business 22 years ago I used to think that was really unfair. For someone who was already having a tough time to have to pay more for a mortgage just seemed wrong. Gradually I began to understand. If you are struggling already you probably are more of a risk to the lender. They get more of a reward, (higher rate) for taking more of a risk on you.
If you want to read more about this subject visit our page on credit and pricing.
If you want to move forward and apply for your California Home Mortgage, we are ready to help you.
The best way to get started is to order your own Residential Mortgage Credit Report (RMCR). This is the official version of your credit report, the exact same one the lender will use to underwrite your loan.
By making this your first step, you will get an advance look at how you stack up with the lenders. Not only that, you will get specific suggestions from the credit reporting agency on how to improve your credit. Based on the report and the suggestions, you may decide some clean-up work is needed. We will help you with that analysis and decision.
Or, you may decide to go forward with your California Home Mortgage and use our online application or the print and fax version.
Whatever your choices, we are here to help you.
