The cost of a home mortgage loan in California has been skyrocketing. A home mortgage loan in the state of California adheres to the same principles as mortgage loans in other states. However, the real estate market in California is unlike that of any other state. There are areas, such as the borough of Manhattan, with property costs on par with those in California, but very few states, on the whole, have homes with market values or mortgage loans with rates that even rival those of the Golden State.
“I feel priced out of the market. . . The high cost of housing and the overall cost of living have made it difficult for a lot of people to purchase properties when they move to California. While salaries in the state tend to reflect these higher costs, many natives are struggling to buy homes, as well. Finding a mortgage loan with affordable rates can make the task much easier, and it is possible to find these loans, especially for those who know all of their options.
Types of California Mortgage Loans
Most people are aware of the standard, fixed rate mortgage loan. This loan has a set APR for the duration of the loan term, which usually lasts 15, 25, or 30 years. Monthly payments for the longer loans are lower, but the overall interest paid is higher. Not many people are familiar with adjustable rate mortgage loans, 125 home equity loans, or interest only loans. An interest only loan will allow a Californian to save money on monthly payments by letting him put principal payments on hold. Adjustable rate mortgages (ARMs) have a low fixed rate for a certain period of time before shifting to a much higher rate. These loans are perfect for people who have no intention of staying in a home for an overly long length of time. 125 home equity loansallow a person to borrow against 125 percent of a home’s value. These loans can give current homeowners access to a lot of money that they can then use to pay off other debts.
A Statewide Overview
It’s not much of a newsflash that properties in the Bay Area, down the Peninsula and into Silicon Valley, as well as along the Central Coast and in the Los Angeles metropolitan area are more costly than ever before. However, whereas people in the Golden State used to consider properties in the Central and San Joaquin Valley as affordable alternatives, this may not be such a “given” anymore. With prices statewide going up and up, it becomes more important than ever to seek out a home loan with favorable rates throughout the life of the loan. Homework now will yield the best payoffs in the future.
Do something about the high cost of west coast loans by checking out our 8 mortgage mistakes.