Welcome to CDC California Mortgage

Thank you for visiting our website. In our site you will find information about California real estate, mortgage loans, refinance, home equities, and all the various loan programs we can get you pre-qualified for by using our quick loan application.

Purchasing a new home in California is not as simple as you might think, it is not as easy as picking your dream property and moving in. In most cases a mortgage loan is needed to be able to purchase that property. CDC California Mortgage knows what the customers needs are, that’s why we have plenty of mortgage loan and mortgage refinancing information in this website. You need to make the right decision, and we want to guide you in finding the best mortgage loan you could possibly get here in California.

 

California Home Loans

“State of the State’s Housing Market”

In recent years, California home loans have grown dramatically along with the State’s booming housing market. Record growths in home values and sales was status quo in our wonderful state. In the middle of the bonanza, lenders were very loose with their money. It seemed anyone with a pulse was able to receive financing at incredible rates. With home values appreciating at torrid rates (12.97% annual increase, 2004), the banks were handing out loans at 110% of the face value of the homes they were financing. To fuel the fire even more, interest rates were at 40-year lows. Oh yes, those were the days…

Where are we now? For the majority of the last half of 2006, economists, investors, and the rest of the seers of the financial world started using a specific word. They spoke of a “bubble” that was just ready to pop. They described the California housing market as an over-inflated balloon just waiting for an impetus to burst and send a good fistful of people into oblivion, not to mention their financiers. “Pessimists!” All the homeowners intonated. Some believe that the simple fact that the word was even uttered in the first place was the catalyst to doom in a self-fulfilling prophecy sort of way.

Since late 2006, 80 mortgage lenders have gone down the path of bankruptcy or takeover. The big banks have since tightened their lending guidelines after witnessing the mass backlash of bad loans and softening home values. The immediate knee-jerk reaction was the closing of the lending floodgates. The risk and opportunity matrix has since inverted itself from one extreme to the other. Interest rates have risen, not quite as high as some economists believe they should have reached, nonetheless they are on the incline path until the dust settles. “Creative financing” is a thing of the past, at least for the time being.

What does it all mean to the homebuyer? As the second quarter dawns on 2007, tides of change are beginning to ebb. The puckering effect is loosening, and we are starting to see a hint of release on the iron-fist grip over lending. Sub-prime lending has since reformed and with risk in mind, new programs are being introduced to assist buyers who have credit concerns. California home loans and sales are still in limbo, not near the rate of increase we enjoyed even a year ago at this time, but also not nearly as bad as the doomsday prophecy advocates had predicted.

Home prices have since steadied and population growth is still in the black in California. It is difficult a task to say that home prices will plummet in California, especially with demand still present. As long as there continues to be in influx of warm bodies to our state, it can be predicted that housing values will be on an upward trend in the long-run. When considering a California home loan, finding the right home and the right lender can make all the difference. Be sure to find a home that fits your needs in price as well as space. Work with a lender familiar with California home loans. Finding the right mortgage program can help you leverage your income and make the most of your investment. All in all, with the right people working for you, home ownership can still be a good thing!

Article by: Harrison Kho

 

Understanding Pre pay

When we talk about Prepay we are talking about prepayment penalty. A term usually referred to as a prepay or written as “pp” or “pre”. This feature basically locks you into your loan for a certain period of time (months or years.) However, they do usually come with a lower interest rate. An advantage worth considering.

One half (1/2) a percentage point, of savings can equal some serious savings over time. For example on a $500,000 loan, the interest-only payment at 6.5% is roughly $200 less than a rate of 7% Again you can’t refinance or sell your home for that period of time.

The prepayment penalty can be quite severe, and as such is something to think seriously about before committing to it. Typically, it is six months worth of interest on 80% of the remaining balance.

Yet, a prepay is not a bad idea. The average person does not sell his/her house in such a short time especially when they like the area, the house, the neighborhood etc…remember, property is a long term investment, so to be thinking short term is not very market savvy.

It is recommended more for adjustable rate loans than for 30 years fixed loans. Make sure it is actually saving you money.

Article by: Noel Francis