California Mortgage Rates

Many homeowners across the country owe more on their houses than the houses are actually worth on the open market. Californians are no stranger to underwater homes. According to a study of mortgage debt by CoreLogic, 30 percent of homeowners in California have negative equity–meaning that they owe more on their homes than they could get if they sold their homes tomorrow.

On top of that, many Californians with negative equity are paying enormous interest rates on their mortgages. Some are paying 7% or higher on mortgages secured before the sub-prime mortgage crisis, meaning that they are spending several thousands of dollars every year on interest. At a time of stubbornly high unemployment and flat or falling wages, this situation is tenuous and unsustainable at worst.

Several analysts have called on the government to assist homeowners who have fallen victim to the burst housing bubble. Dean Baker, Co-director of the Center for Economic Policy Research (CEPR), has written in the Huffington Post that “the Federal government has refused to take major initiatives to help underwater homeowners.” Baker has called on the government to act and act swiftly to help homeowners who owe too much.

There is, however, one program that many homeowners can obtain to save thousands of dollars and stay in their current home while also helping them to lower their monthly mortgage payments. This is thanks to the Home Affordable Refinance Program, which was recently expanded to all homeowners with a mortgage owned or guaranteed by Fannie Mae or Freddie Mac. Homeowners with loans guaranteed by either company qualify for a HARP 2.0 refinance, as long as they began their mortgage before June 1, 2009 and they are current on their mortgage payments. Additionally, homeowners who have no 30-day or more late payments in the six months before closing a HARP 2.0 refinance and no more than one late payment in the twelve months before closing will qualify. For California homeowners who fulfill these criteria, a HARP 2.0 refinance can be completed with any lender. You do not need to refinance with your current lender, so you have a chance to shop around for low mortgage rates.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard 0.7 to 1% point origination fee.