Is This Year The Right Time For You To Make That Home Purchase? California Platinum Loans Explains How Mortgage Rates Can Guide You Make That Decision Today

Did you know that most mortgage loan professionals have their calculators at hand all of the time? You don’t have to do that, but if you’ve been thinking about buying a house in the next three to twelve months, how can you choose which is the right time? Many people look at home purchase prices to guide their decisions. With prices steadily increasing, you might find that the longer you wait to buy, the fewer homes you’ll find available in your price range. But what about interest rates? Should they influence your decision to buy a home in the year to come?

Yes — mortgage interest rates can make a big difference in home buying

Would you believe that in 1981, home loan interest rates averaged over 18%? Between 1980 and 1982, the lowest average 30-year fixed-rate mortgage was 16.35%. If you bought a $300,000 house in 1981 with a 20% down payment and a 30-year mortgage at an interest rate of 18%, your monthly principal and interest would be $3,617. At a 5% interest rate, your principal and interest would be $1,288. So, yes, mortgage interest rates can make a big difference.

Fortunately for homebuyers, interest rates have been much lower than 18% in the past ten years. The average interest rate in 2018 was 4.54%. In 2019, this average dropped under 4%. Bankrate reported that 90% of mortgages as of 2018 had interest rates between 3.5% and 6%. 

Fannie Mae and Freddie Mac, the two largest government-affiliated mortgage corporations, are predicting that 30-year fixed-rate mortgages will average between 3.6% and 3.7% throughout 2020. The Mortgage Bankers Association predicts that interest rates will be about 3.9% throughout 2020. Other organizations, including the National Association of Realtors, are predicting 3.6% average interest rates for a 30-year fixed-rate mortgage.

Will these low rates last forever?

It’s unlikely that the current low mortgage interest rates will stay the same indefinitely. If you have a higher interest rate home loan, you may be able to refinance for a lower interest rate and lower monthly payments. If you’re interested in buying a house over the next year, you should be aware that rates began to decrease in November 2018, but trends like this don’t last forever. Right now, mortgage interest rates can make many homes affordable and can help you to lock in a 30-year or 15-year fixed-rate home loan for the home you want to buy.


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Your Super Jumbo Mortgage: Can You Get A $10 Million Mortgage And Buy Your Dream Home? Can The Term Be as Light As Payable in 30 Years?

What is a super jumbo mortgage? A super jumbo loan significantly exceeds conforming loan limits published by the Federal Housing Financing Agency (FHFA). A “regular” jumbo mortgage is a mortgage for more than $484,350 in lower housing cost counties. In higher cost counties, “regular” jumbo mortgages are any amount over $726,525. If you want a jumbo mortgage of $5 million or $10 million or more, you’ll have different loan terms and different underwriting standards than loans issued for lower amounts.

Can I get a 30 year jumbo mortgage? What are 30 year jumbo mortgage rates?

If you’ve been looking for super jumbo mortgage rates online, you’ve probably discovered that most, if not all, online mortgage calculators don’t go over $1.5 to $2 million, much less $10 million. 

30 year jumbo home loan rates may have higher interest rates than the lowest conforming 30 year mortgage rates you’ll see quoted online. A benchmarked rate uses a survey of the largest mortgage lenders, including banks like Wells Fargo. The benchmark rate will be the median rate from all of the surveyed lenders. For example, you might find rates averaged between the largest home mortgage lenders that include:

  • 30 year jumbo mortgage rate: 4.08% with a 4.20% APR 

  • 15 year jumbo mortgage rate: 3.85% with a 4.05% APR 

In jumbo ARM mortgages, you can find more variable rates, including:

  • 5/1 ARM jumbo mortgage rate: 3.89% with a 7.11% APR

  • 7/1 ARM jumbo mortgage rate: 3.82% with a 6.22% APR

How do you qualify for a super jumbo home mortgage? What are jumbo loan requirements?

Underwriting criteria for mortgages can go on for hundreds of pages. This is one of the most important reasons you should work with a qualified home mortgage specialist. Mortgage loan specialists know the requirements for dozens of different lenders. They can locate the super jumbo mortgage that’s right for you. They can make the qualification process smooth and trouble-free, so you can receive a super jumbo mortgage of $5 million or $10 million to buy the elite property you desire. 

When qualifying for a super jumbo mortgage, the entire process differs from the process for conforming mortgages with lower amounts. Your mortgage specialist will help to structure the super jumbo mortgage that best suits your finances and home purchase selection. You can access this concierge mortgage service by working with a mortgage professional who will offer you security, privacy, and confidence to receive the best super jumbo home loan for $10 million or more. 


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Can You Use an Interest Only ARM to Buy a Home And Achieve Financial Goals?

With fixed-rate 30-year mortgages at a relatively low rate, you may not be thinking about an adjustable rate mortgage (ARM) or an interest-only ARM. However, an interest only ARM could help you achieve your financial goals, including home ownership and investment.

How does an interest-only adjustable rate mortgage work?

With an interest-only ARM, you’ll get an initial loan period with set monthly interest-only payments. This initial period is usually around five years but can be shorter or longer. 

If you have a $500,000 4% interest-only 5/1 ARM, your starting interest-only mortgage payment will be $1,667.00. Your payment will increase after 5 years in this type of mortgage. After 5 years, your payment will increase, reflecting a remaining 25 years of principal repayment and interest. Monthly ARM payments could increase to a potential maximum of $3,772.30 a month, assuming .25% annual interest increases with an interest rate cap of 12%. 

Which type of financial and home buying circumstance can fit an interest-only adjustable rate mortgage?

Interest-only ARMS can be a good fit if you have a variable income and cash reserves. If you anticipate that your income will increase over time, you can also be a good fit for an interest-only ARM. Some interest-only ARMs will also allow you to make principal payments besides the interest-only payments during the first years of the mortgage.

Do you plan to stay in the home a short time and are you confident you can sell it without taking a large loss? This is another financial situation that could be a good fit for an interest-only ARM.

If you have enough income to easily cover the mortgage payment when the mortgage adjusts and includes principal and interest payments, and you’re disciplined about your finances, you can invest the principal you would have paid into your mortgage, and keep the difference when your mortgage adjusts.

There’s one scenario that isn’t the best fit for an interest-only ARM. If you can only buy a home based on an interest-only loan, this mortgage is probably not a smart financial decision.

Work with a qualified, experienced mortgage expert to learn if an interest-only ARM is a good financial choice. 


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