Current California Mortgage Rates – KOAM

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California real estate is among the most expensive in the country, so getting the most competitive rate is essential for buyers looking to save money where they can.

One of the best ways to get the lowest possible mortgage rate is to shop around by comparing rates from multiple lenders.

What are the current mortgage rates in California?

As of Wednesday, July 20, 2022, mortgage rates averaged as follows in California, according to data from Bankrate:

  • Fixed 30 years: 5.80%
  • 15 years fixed: 5.03%
  • ARM 5/1: 3.94%

The 30 and 15 year rates are above the national averages published by Freddie Mac, while the ARM 5/1 is just below. Here are the national mortgage rate averages for the week ending July 14: the 30-year fixed rate mortgage was 5.51%; the 15-year fixed rate mortgage was 4.67%; and the 5/1 Variable Rate Mortgage (ARM) was 4.35%.

What type of mortgage is right for you?

For those who want to maximize their money to ensure the best return on investment, finding the right mortgage is essential. Some borrowers might think the best way to save money is to pay off their mortgage faster, by opting for a shorter loan term with higher monthly payments, but that’s not always the case.

If you can lock in a low mortgage rate, it might be better to get a 30-year loan and spend the extra money you save on monthly payments on something that has a better return on investment, like credit card debt or other high interest loans.

Related: Best Mortgage Lenders

Types of mortgages

Choosing the right mortgage depends on your financial situation and your goals. A low mortgage deposit requirements might make sense for some, while others might need a giant mortgage.

But there are several types of mortgages that tick a variety of boxes, here are a few to consider:

Conventional mortgages

Conventional mortgages are Fannie Mae and Freddie Mac underwriting standard loans. These are the most common mortgages that are not guaranteed by the government.

Conventional mortgages tend to have stricter terms than government-backed loans, but they also offer benefits, such as looser home inspection standards and the ability to opt out. private mortgage insurance (PMI) after reaching 20% ​​equity (without refinancing).

FHA Loans

Federal Housing Administration (FHA) loans have lower interest rates and only require a 3.5% down payment.

The disadvantage of FHA Loans is that if you put less than 20% down, you must pay a mortgage loan insurance (MIP) premium which can only be waived if you refinance to a conventional mortgage.

VA Loans

Department of Veterans Affairs (VA) loans are only available to active duty military and veterans and their spouses. AV loans are advantageous because there are no down payment requirements, credit requirements are not as stringent, and your closing costs can be rolled into the loan.

USDA Mortgages

United States Department of Agriculture (USDA) loans are for home buyers in rural, USDA-designated areas. Similar to VA loans, USDA Loans have no down payment requirements and credit requirements are more flexible than conventional mortgages.

What you need to know about buying a home in California

Currently, California property taxes are among the lowest in the country. According to the Tax Foundation, California’s property taxes were the fourteenth lowest in the United States, with state and local property taxes amounting to $2,411 per capita.

Help for first-time buyers

Buyers who need help with a down payment or closing costs can take advantage of California’s many assistance programs. Some of these programs are designed to help home buyers (those who haven’t owned a home for three years) as well as low- to middle-income buyers.

The California Housing Finance Agency, or CalHFA, offers several programs designed to help buyers become homeowners. Some of these programs include grants, interest-free deferred loans, and financial assistance for the construction of secondary suites (UDA).

Related: Best mortgage lenders for first-time home buyers

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