Get today's quote
now. California Mortgage
Interest Rates.
Compare
California mortgage rates before you
buy or refinance your home loan.
Find the lowest interest and
fees available. Search for current California mortgage interest rates
from lenders and brokers nationwide. Most lenders will update their rates every day
or as they change.
Mortgage rates in California as well as the nation
move daily and sometimes by the minute. There can be many factors that
contribute to and affect
the money markets. You can keep current with these indicators by reading
financial publications like Forbes, Investors Business Daily and so forth.
You can watch these financial indices in real time on CNNFN or on
financial websites. That is a lot of effort if you're not in the business. The 10 year treasury yield is what we watch on
a daily
basis to get a handle for where current mortgage interest rates in
California and in
nationally are going. Interest percentages can be manipulated up or down
by what is called "yield maintenance". The value of a home loan security
is determined by the market. The interest or California mortgage rates,
can be adjusted up or down while keeping value or "yield" on the loan
unchanged with the
use of "points" to buy down the loan or "rebates" to
buy up the loan. Yield maintenance applies to "A" paper as well as
bad credit loans. It also
applies to purchase financing or
home loan
refinancing. Our loan calculators
will show payment differences.
DEFINITIONS:
"Points" are nothing more than "prepaid interest" that are
paid at closing either in cash or financed into the
loan amount on refinances on some purchase loans. When you agree to paying "points", you reduce the note rate for the
full
term of the loan. Here is a hypothetical example: If the today's mortgage rate for
California is 6.5%
on a 30 year fixed, you could elect to "buy down" the rate to say
6.25% for about
.75% or 3/4 points. A "point" is one percentage point or 1% of the loan amount. In this example, it
would be a prudent financial decision to go ahead and "buy down" the
mortgage rates IF the California borrower plans on
keeping the loan for at least 3 years. After 3 years it's pure profit.
.25% or 1/4% buy-down x 3 years = 3/4% or .75%.
The amount the borrower paid for the buy-down at closing. The three year period is called the "pay
back" period. That is amount of time it takes to re-pay yourself the money
you paid in the first place. "Points" are NOT a typical standard and customary
loan fee or closing cost. Points are purely a "yield maintenance"
method. Lower interest = higher points. Higher interest = lower points or a
rebate.
"Rebates" are when a lender pays back
"points" to the borrower in exchange for accepting a higher than the par
( market price with no points or rebates ) California mortgage rates.
These funds are usually used by the borrower to
pay for all or part of their standard and customary costs. Rebates
are also a "yield maintenance" tool. This technique is
how the "No Cost", "Low Flat Fee" and "reduced cost"
loans can be made.
All home financing, regardless of who originates it, must maintain the
current market yield. It not they are not saleable on the secondary
market. If the lender can't sell the paper, they are stuck with it and
can't generate new funds to make new loans with.
"Standard and Customary Loan Fees" are
applicable to all home loans because nobody works for free. Many lenders and brokers will
intentionally mislead
prospective borrowers through deceptive advertising that implies otherwise.
Weather it's
broker lenders in northern CA and
southern California lenders and brokers or national lenders or
brokers, it's the same.
Conclusion: When you hear the phrases "no cost", " low flat fee" or "low cost "
loans, just know the the value of
that paper is the same as a " standard and customary cost loan". It's just
a manipulation of California mortgage rates, points and rebates. There is
no "free lunch". See
Good Faith Estimate Form.
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