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Zillow recently surveyed about 4,600 prospective home buyers who were considering buying a home in Pacific coastal states, including California. Over 8 out of 10 said they were concerned about extreme weather events and how they’d affect their home purchase and value over time. Extreme weather can include wildfires, heatwaves, coastal flooding, mudslides, and even hurricanes. 

How frequently do extreme weather events occur in Los Angeles vs. other nearby Southern California areas? These events do occur in LA, but much less often than in Inland counties.

California State Climate Adaptation Report For Los Angeles

The state of California has issued several reports on climate adaptation. In the LA area, homeowners can be affected by increasing heat, extremes of rain and dryness, and flooding. 

Within LA County, however, many neighborhoods are expected to be less affected by climate extremes than inland Southern California areas. While we have seen serious fires in Malibu and recent storms like Tropical Storm Hilary have had impacts, the greatest amounts of flooding were seen in inland areas.

Is LA At Risk For Wildfires?

Wildfires are common in Los Angeles County, but they occur less frequently and less severely than in Inland areas or Northern California. According to the LA County Fire Department, wildfires usually occur in hillside areas that are adjacent to the Angeles National Forest or other wilderness regions. If you buy a house in one of LA’s urban areas, your biggest risk will be wildfire smoke, not flames that could destroy your home.

However, there are a number of beautiful LA neighborhoods which are located in hillside areas, including some of the city’s most exclusive zip codes, which require fire protection and defense. 

The LA County Fire Department provides a personal wildfire action plan for homeowners. If you purchase a home in one of these areas, chances are, the homeowner has already prepared the property for defense against fire as well as other climate impacts.

Insurance Considerations for Los Angeles Homes

Most homeowners insurance policies will cover fire damage, as well as flood and other potential climate impacts. However, some homes and estate properties are built in areas of high fire risk in LA County, including Calabasas, Bel Air and Brentwood, Agoura Hills, Malibu, La Canada Flintridge, and the Palos Verdes Peninsula. 

Homes in high fire risk areas can have higher insurance premiums. Owners can also apply for the state’s FAIR insurance program that provides wildfire insurance coverage. Flood insurance coverage can also be provided through carriers that specialize in this type of policy.

“Is my neighborhood safe?” is a question that a qualified and experienced real estate professional like the experts at California Platinum Real Estate and California Platinum Loans will answer for you. They are qualified to discuss the risks and rewards of buying a home in Los Angeles. With over 18 million residents, the Los Angeles area is being affected by extreme weather events. However, choosing the right home in the right neighborhood will help you to mitigate these risks and enjoy many safe, happy years to come.

Sources:

CalFire, “Los Angeles County Very High Fire Risk Areas,” url: https://osfm.fire.ca.gov/media/7280/losangelescounty.pdf

Los Angeles County Fire Department, “Ready! Set! Go! Personal Wildfire Action Plan,” url: https://fire.lacounty.gov/rsg/

Murphy, Kate & Melissa Santos. “Californians’ climate concern mounts during home buying process,” AXIOS San Diego, 12 September 2023, url: https://www.axios.com/local/san-diego/2023/09/12/climate-change-real-estate-california

Severino, Carly. “What you need to know about wildfire insurance in California,” Bankrate, 16 June 2023, url: https://www.bankrate.com/insurance/homeowners-insurance/wildfire-insurance-california/

State of California, “California Climate Adaptation Strategy: Los Angeles,” url: https://climateresilience.ca.gov/regions/los-angeles.html

Can you get a mortgage now and refinance later when interest rates go down? The answer is “yes.” Many people have made this choice in the LA area in recent years. 

The Federal Reserve is no longer increasing interest rates every quarter. It’s more than possible that mortgage interest rates will stay level and potentially decline as we move into 2024. When interest rates are lower, refinancing options can make sense for many different home ownership and buying situations.

If you’re considering this option, what are some of the advantages to getting a mortgage with the plan of refinancing later?

Reasons to Refinance

There are several reasons to refinance a mortgage. First, if interest rates go down, you can update your rate and lower your monthly payment while still building equity.

Second, you might consider refinancing from a longer-term 30-year mortgage to a shorter term, which would allow you to pay off your home sooner.

Third, you might have a variable or adjustable rate mortgage (ARM), and want to refinance into a fixed rate mortgage. This option can give you financial stability.

You may also want to refinance your mortgage to eliminate mortgage insurance, which adds to your payment every month.

Home Equity and Mortgage Refinancing

You build equity in your home not only by making monthly mortgage principal payments, but also through increases in your home’s value. 

Is it realistic to assume that LA home prices will more than double over the next ten years? If we look back, there are periods of time where home prices in LA and nationwide didn’t continuously increase.

However, in 2013, the median sales price for a LA-area home was $410,000. Ten years later, the median sales price is $882,020. That’s an increase of more than 115 percent. This means that many Los Angeles homeowners have significant equity in their property.

You might be able to refinance your home mortgage to pay off big expenses like home repairs and improvements. Other uses for home equity and refinancing include paying for educational costs and paying off other high-interest debt.

Even in today’s higher interest rate environment, mortgage refinancing can make sense from different financial perspectives.

This is why experienced loan experts like California Platinum Loans, can help. Work with their team to uncover the mortgage programs that are right for you, whether for initial home purchase or refinancing.

Sources:

Martin, Erik J. “How Soon Can I Refinance My House? Here are the Rules,” The Mortgage Reports, 13 July 2023, url: https://themortgagereports.com/54100/how-soon-can-i-refinance-after-i-close-on-my-mortgage

Los Angeles Almanac. “Median Home Prices Southern California Existing Detached Homes by County, 1990-2023.” url: http://www.laalmanac.com/economy/ec37.php

Poenar, Roxana. “Home Prices in LA County Are 69% Higher Than 5 Years Ago,” Property Shark, 27 November 2017, url: https://www.propertyshark.com/Real-Estate-Reports/2017/11/27/overview-la-county-housing-market/

If you’ve gotten a new mortgage this past year, you might be considering refinancing. How long do you need to wait to refinance? Do you need to wait any time at all? 

The type of loan you have influences whether or not you can quickly refinance your home loan in Los Angeles. If you have a conventional mortgage or some types of government-backed loans, you may be able to immediately refinance, with one exception: the majority of cash-out refinances ask that owners be in the home for at least 12 months.

Can I Refinance My Mortgage Immediately?

In some cases, yes. Some lenders do allow owners to refinance their mortgage immediately after they take out a mortgage. This is an unusual situation, but it does happen.

FHA Loans And Refinancing

Some FHA loans do allow borrowers to refinance immediately. If you are refinancing from one FHA loan rate to another, this is a “simple refinance.” There’s no FHA requirement to wait to refinance in this case as long as you are not taking cash out. However, some lenders may ask borrowers to wait six months before a simple refinance. In this case, mortgage experts say you can apply to refinance with another company.

FHA streamline refinances don’t require appraisals, but you do have to have the mortgage for at least 210 days and made at least six monthly payments. This type of refinance allows borrowers to have one late payment. 

However, here’s a tip about monthly payments: some FHA mortgages and many others require on-time mortgage payments, for at least six months and at times, up to 12 months before you apply.

Other Government-Backed Loans And Refinancing

If you have a VA loan and want to refinance, you need to wait six months or at least 210 days after you made your first mortgage payment. There are more complex rules for USDA-backed loans, but in general, you need to have made on-time payments for at least 180 days before refinancing.

Jumbo Loan Refinancing Requirements Vary From Lender to Lender

Jumbo loans are non-conforming mortgages, and therefore have rules that are specific to each lender. If you have a jumbo mortgage, this is one reason why it’s important to work with an experienced mortgage loan broker like California Platinum Loans. The same is true if you have a VA loan, an FHA loan, or a conventional home loan. 

There are many reasons to want to refinance a mortgage, and working with experts who have access to many different lenders can guide you in the direction of your best options and opportunities. Fill out the quick, easy refinance questionnaire to learn more today.

Sources:

Lewis, Holden and Kate Wood. “How Soon Can You Refinance A Mortgage? Here are the Rules,” Nerdwallet, 4 August 2023, url: https://www.nerdwallet.com/article/mortgages/how-soon-can-you-refinance-mortgage

Martin, Erik J. “How Soon Can I Refinance My House? Here Are The Rules,” The Mortgage Reports, 13 July 2023, url: https://themortgagereports.com/54100/how-soon-can-i-refinance-after-i-close-on-my-mortgage