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California also offers 30-year, fixed Jumbo loans and 5/1 ARM Jumbo loans. (Jumbo loans are those in which the amount being loaned is above what is considered the “average” amount for a home loan.) This gives the prospective homeowner a number of choices from which to choose.
As with home loans in any other state, the shorter the repayment period, the lower the interest rate will be. Payments will be considerably higher than those of a loan with a longer repayment period, but the home will be paid off in a shorter amount of time. If a homeowner is able to meet the higher monthly payments, then a 15-year, fixed-rate mortgage may be a good idea.
If, however, a homeowner is concerned about meeting a large mortgage payment each month, he or she may prefer to opt for a 30-year, fixed-rate mortgage. It will take longer to “pay off” the home, but the monthly payments will be lower.
Adjustable rate mortgages (ARMs) are also available in California. The usual terms for an ARM are 5/1. Current housing trends and economic factors most often determine whether or not this would be a viable option for a homeowner, as there is the possibility of a currently low interest rate suddenly increasing by a substantial rate. However, there is also the possibility of the interest rate decreasing.
With a 5/1 ARM, it really doesn’t matter what happens the first five years. It’s the sixth year that things start getting “interesting”. Of course, there is always the option of re-financing at the end of the five years, if one is able to do so.
Those who are buying a more expensive home than they have every previously owned can take advantage of the “jumbo” loans that are available in California. There are two types: a fixed-rate mortgage loan and an ARM loan.
Ultimately, the better a person’s credit score, the more likely he or she will be able to get the home and the home loan that is desired. A good credit score will enable the borrower to pick and choose, where loan types are concerned, whereas a “less-than-perfect” score might limit the borrower in the type of loan that can be obtained.
If a borrower’s credit score is very good, he or she may choose to make a smaller down payment, and use the remaining money for the mortgage payments. A borrower with a few “dings” on his or her credit record may find that a larger down payment will enable the borrower to look into obtaining a loan that he or she might otherwise have not been eligible for.
Other factors will also determine how much can be borrowed and for how long. However, knowing that there are at least five choices of loan types in California will make it easier for the borrower to figure out which loan type is best.
California Loans
California offers a wide range of home loans for the person or family looking to move or relocate to the state. These include 30-year, fixed-rate, 15-year, fixed-rate and 5/1 ARM (in which the interest rate at the time the loan was financed is “good” for five years, then it is adjusted each year after that. This means it can go up or down, depending on what the prime rate is doing.)California also offers 30-year, fixed Jumbo loans and 5/1 ARM Jumbo loans. (Jumbo loans are those in which the amount being loaned is above what is considered the “average” amount for a home loan.) This gives the prospective homeowner a number of choices from which to choose.
As with home loans in any other state, the shorter the repayment period, the lower the interest rate will be. Payments will be considerably higher than those of a loan with a longer repayment period, but the home will be paid off in a shorter amount of time. If a homeowner is able to meet the higher monthly payments, then a 15-year, fixed-rate mortgage may be a good idea.
If, however, a homeowner is concerned about meeting a large mortgage payment each month, he or she may prefer to opt for a 30-year, fixed-rate mortgage. It will take longer to “pay off” the home, but the monthly payments will be lower.
Adjustable rate mortgages (ARMs) are also available in California. The usual terms for an ARM are 5/1. Current housing trends and economic factors most often determine whether or not this would be a viable option for a homeowner, as there is the possibility of a currently low interest rate suddenly increasing by a substantial rate. However, there is also the possibility of the interest rate decreasing.
With a 5/1 ARM, it really doesn’t matter what happens the first five years. It’s the sixth year that things start getting “interesting”. Of course, there is always the option of re-financing at the end of the five years, if one is able to do so.
Those who are buying a more expensive home than they have every previously owned can take advantage of the “jumbo” loans that are available in California. There are two types: a fixed-rate mortgage loan and an ARM loan.
Ultimately, the better a person’s credit score, the more likely he or she will be able to get the home and the home loan that is desired. A good credit score will enable the borrower to pick and choose, where loan types are concerned, whereas a “less-than-perfect” score might limit the borrower in the type of loan that can be obtained.
If a borrower’s credit score is very good, he or she may choose to make a smaller down payment, and use the remaining money for the mortgage payments. A borrower with a few “dings” on his or her credit record may find that a larger down payment will enable the borrower to look into obtaining a loan that he or she might otherwise have not been eligible for.
Other factors will also determine how much can be borrowed and for how long. However, knowing that there are at least five choices of loan types in California will make it easier for the borrower to figure out which loan type is best.
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