Los Angeles Home Mortgage Rates Articles and Tips

How to Select What Type of Los Angeles, CA Mortgage is Best for You

Wed, 30 Sep 2009 19:42:56 -0500

If you need the best kind of Los Angeles, California home mortgage for your lifestyle, there are a few important characteristics of home loans to keep in mind. Let's take a look at popular Los Angeles mortgages to determine which is best for you.

Los Angeles Adjustable Rate Mortgage (ARM)

An ARM is a mortgage that has a changeable interest rate that changes over the life of the loan. Adjustable Rate Mortgages have a low initial interest rate that lasts for a few years. After this initial time period, the rate changes based on current market rates. Los Angeles mortgage lenders recommend an Adjustable Rate Mortgage to homebuyers who plan to live in their new home less than 7 years, or for individuals who are comfortable with the heightened risk of a variable interest rate and monthly mortgage payment.

Los Angeles Fixed Rate Mortgage (FRM)

A FRM is the most popular Los Angeles, California mortgage type due to its simplicity and stability. A FRM has a set interest rate that stays the same for the entire loan term. This means that the Los Angeles mortgage payment amount stays the same every month. Los Angeles mortgage lenders recommend a Fixed Rate Mortgage to homebuyers planning to stay in their home for at least 7 years, for homebuyers who are able to lock in a low interest rate, or for Los Angeles homebuyers who are retired.

Los Angeles, California Jumbo Loan

Purchasing a home in Los Angeles can be expensive. A Los Angeles, California jumbo loan is a mortgage that has a loan amount higher than $417,000. Prospective homebuyers apply for a Los Angeles jumbo loan when a traditional mortgage cannot cover the total amount to be borrowed. Mortgage lenders recommend jumbo loans to individuals wanting to buy an expensive home in the Los Angeles area.

Los Angeles Interest Only Mortgage

An Interest Only mortgage has two different payment periods. During the first period, the homebuyer is only responsible for paying interest. This means that their Los Angeles monthly mortgage payment will be quite low. After this interest-only time period, the homebuyer pays both interest and principal, making their monthly payment much more expensive. Los Angeles mortgage lenders recommend an Interest Only Mortgage to individuals who currently have restricted monthly income but expect more income in the future. An Interest Only mortgage is also good for developers who do not want to commit lots of money into a property, or a Los Angeles borrower who can quickly pay off his or her mortgage.

Los Angeles Home Equity Loan (HEL)

A HEL allows current mortgage holders the ability to tap into their home equity and receive much-needed cash. A HEL has a fixed interest rate. Los Angeles mortgage lenders recommend a Home Equity Loan to homeowners needing a single lump sum of money to pay bills, consolidate debt, or fund home repairs.

Los Angeles Home Equity Line of Credit (HELOC)

For Los Angeles homeowners needing to borrow money multiple times, however, Los Angeles, CA mortgage lenders suggest applying for a Home Equity Line of Credit. A HELOC acts like a credit card, in that the homeowner can access the money multiple times over the life of the loan, until they're reached their spending limit. A Los Angeles HELOC has an adjustable interest rate.

Los Angeles, CA Reverse Mortgage

Los Angeles mortgage lenders suggest a Reverse Mortgage to borrowers who are at least 62-years-old that need to convert some of their home equity into cash. Many Los Angeles senior citizens take out a Reverse Mortgage to help pay for medical expenses, home repairs, or daily living expenses. A Reverse Mortgage is not recommended for homeowners who think they'll move in the near future, or for those needing to only borrow a small amount of money. This is because Los Angeles Reverse Mortgages have high up-front costs, and they must be repaid in-full if the homeowner sells the home.

Best Rates on Los Angeles Jumbo Loans

Sun, 12 Jul 2009 15:54:19 -0500

A jumbo loan (a.k.a. non-conforming loan) is a mortgage with a loan amount that exceeds the conforming loan limit set by government-sponsored mortgage lenders, Fannie Mae and Freddie Mac. The current jumbo loan amount is set for mortgages over $417,000 (APR based on $500,000).

Why Do Jumbo Loans Exist?
Owning a home in LA is expensive. In rural areas, a $400,000 home might be considered a mansion. In Los Angeles, however, a $400,000 might be considered a basic home. Jumbo loans go into effect when traditional mortgage loans cannot cover the full amount to be borrowed. This often happens in more expensive areas and populated urban areas like Los Angeles.

Advantages & Disadvantages
Jumbo loans have higher interest rates than traditional mortgages, but they offer greater financial flexibility and allow qualified borrowers to purchase more expensive homes. Borrowers can receive Los Angeles jumbo loans in various mortgage packages, including:

Fixed Rate Mortgages (FRM);
Adjustable Rate Mortgages (ARM);
FHA loans up to 97% financing.

Jumbo loans have become more and more popular with today’s low interest rates. People can now borrow more money at a lower rate in order to get the home of their dreams.

Current Los Angeles Jumbo Loan Rates
Today’s best rates* for Los Angeles jumbo loans are as follows:

For a 30-year Fixed LA Jumbo Loan
Between 4.750%; 4.869% APR and 5.625%; 5.849% APR

For a 15-year Fixed LA Jumbo Loan
Between 4.875%; 5.02% APR and 5.500%; 5.858% APR

For a 7/1 Adjustable LA Jumbo Loan
6.125%; 4.408% APR

For a 3/1 Adjustable LA Jumbo Loan
Between 3.875%; 3.915% APR and 5.250%; 5.301% APR

For a 3/1 Adjustable LA Jumbo Loan
Between 3.750%; 3.785% APR and 4.625%; 3.949% APR

In order to find the best mortgage rate to fit your needs, speak with a mortgage lender about your current financial situation and your future home-owning goals. They will work with you to find the best Los Angeles jumbo loan to fit your needs.

* Source: Los Angeles jumbo loan rates from Mortgage Loan Directory and Information, Inc.

Los Angeles Mortgage Basics for First-Time Homebuyers

Fri, 03 Jul 2009 08:44:37 -0500

For first-time homebuyers, learning about mortgages can be an intense process. Selecting the type of mortgage that best fits your Los Angeles home buying needs is a big decision, since it is a monthly payment that you will be making for years and years to come. To learn which mortgage is right for you, speak with a qualified, trustworthy lender. Don’t be afraid to ask questions about three popular types of mortgages available for first-time homebuyers.

1. Fixed Rate Mortgage
Fixed Rate Mortgages are the most common type of mortgage loan; more than half of Los Angeles mortgage owners have one. It is most popular among first-time homebuyers who seek security and simplicity. A Fixed Rate Mortgage (FRM) has a designated interest rate that is fixed for the entire term of the mortgage loan. This means that your monthly payment is the same every month for ‘x’ number of years. Most loan terms are 15- or 30-years; however, you can get a shorter or longer term if necessary.

A Fixed Rate Mortgage is a good option for people who:
- plan to stay in their home for 10 or more years;
- enjoy knowing exactly what their monthly mortgage payment is so that they can budget accordingly;
- received an initial low interest rate and want to lock it down for the entire loan term.

2. Adjustable Rate Mortgage
An Adjustable Rate Mortgage (ARM) is a mortgage loan that has a flexible interest rate which changes over the life of the loan. An ARM generally has a lower initial interest rate than a FRM, meaning that the monthly payment is less. This makes qualifying for an ARM sometimes easier than for a FRM.

An Adjustable Mortgage Rate poses more risk for the borrower, since the interest rate could rise or fall, depending on the market. Be sure to speak to your lender about interest rate caps and payment caps, so that you understand what your maximum monthly payment could be.

Individuals should consider an Adjustable Rate Mortgage if they:
- plan to move from their home in less than 10 years;
- are not concerned with the increased risk associated with an adjustable interest rate.

3. Interest Only Mortgage
With an Interest Only Mortgage, borrowers must only pay the interest on their mortgage loan for a set number of years. For example, if you get an Interest Only Mortgage for 7 years, you will only pay the (adjustable) interest rate for that term. After 7 years, you will be responsible for both interest and principal payments.

An Interest Only Mortgage is a great option for:
- first-time homebuyers who have limited monthly cash flow and can only make small payments;
- investors who wish to invest but not lock a significant amount of money into purchasing property;
- short-term homeowners who can quickly pay off their mortgage loan.