California indeed has some of the priciest real estate in the country. This means that if you are buying a home in California, you will want to get the best possible interest rate on your mortgage.
Before you start looking for a home, it’s best to know more about the current California mortgage rates and the different types of mortgages you can choose from:
What are the Current Mortgage Rates in California?
As of August 20, 2022, the average mortgage rates in California are as follows:
- For 30-year fixed – 5.80%
- For 15-year fixed – 5.03%
- For 5/1 ARM – 3.94%
The mortgage rates in California have been on the rise in recent months. However, they’re still relatively low when compared to historical averages.
If you are considering buying a home in California, now is a good time to lock in a low mortgage rate.
What Kind of Mortgage Suits You?
The type of mortgage you choose will have a big impact on how much you pay over the life of your loan, so it’s important to choose wisely. There are different kinds of mortgages that you can choose from, and each has its own set of pros and cons. Here are a few of the most popular types of mortgages to help you decide which one is right for you:
- Fixed-Rate Mortgage: As the name suggests, a fixed-rate mortgage has an interest rate that remains the same for the life of the loan. This makes budgeting for your monthly mortgage payment much easier, as you’ll always know exactly how much you’ll need to pay. The downside of a fixed-rate mortgage is that your monthly payment will be higher than it would be with a variable-rate mortgage since the interest rate is locked in for the life of the loan.
- Adjustable-Rate Mortgage: An adjustable-rate mortgage (ARM) is a type of mortgage where the interest rate is not fixed but instead is adjusted periodically based on market conditions. What this means is that your monthly loan payments could go up or down depending on market conditions. An ARM is typically a good option for borrowers who expect to sell their home or refinance within a few years, as it can provide lower monthly payments during that initial period.
- FHA Loan: A Federal Housing Administration (FHA) loan is a type of mortgage that is insured by the FHA. This insurance can protect the lender from losses if the borrower defaults on the loan. FHA loans are available to all borrowers, even those with less-than-perfect credit.
- VA Loan: A VA loan is a type of mortgage that is guaranteed by the Department of Veterans Affairs (VA). This guarantee protects the lender from losses if the borrower defaults on the loan. VA loans are available to all eligible veterans, and they often come with favorable terms, such as low or no down payment and no private mortgage insurance.
Are You a First-Time Home Buyer
Choosing the right type of mortgage is a big decision, and there’s no one-size-fits-all answer. The best way to decide which type of mortgage is right for you is to speak with a lender who can discuss with you in detail all the things you need to know regarding different mortgage types and the current home mortgage rates in California.
Express Capital is a reputable company that can provide a first time home buyer with the mortgage solution they need when buying a home in Tustin and throughout the US. Get in touch with us at (949) 751-6940 to know more about our services!