There are a lot of changes surrounding the lending world as we head into 2017. I'm joined today by our team's preferred lender to discuss how these changes affect buyers and sellers in southern California.
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What does the mortgage interest rate look like as we start 2017? I'm joined today by our preferred lender Brandon Moss of Prime Lending to help me explain this topic more in depth.
As you probably know, interest rates have gone up over the last couple months and they're up to levels we haven't seen since 2014. While rates are higher than they've been in the past couple years, they are still historically low—in the 4% to 4.5% range depending on your down payment, credit score, and some other factors.
The interesting thing, Brandon says, is an increase in interest in non-conforming products like ARMs (adjustable rate mortgages) that have a much lower starting rate for five, seven, or even 10 years, which helps keep monthly payments lower in a higher rate environment. Brandon added that these ARMs are not the same kind people had back in 2000—they are a much safer product that is harder to qualify for and requires more cash reserves in the bank before closing. They're solid products that are a good alternative for buyers to get into a home with a lower payment.
These ARMs are not the same kind people had back in 2000—they are a much safer product.
With prices going up here in the the southern California market, the federal government has raised the conforming loan limits for 2017. As Brandon points out, the nationwide standard conforming loan limit has risen from $417,000 up to $424,000. In higher cost areas like Los Angeles, Ventura County, and Orange County, loan limits have gone up from $625,000 to $634,000. This helps buyers get a loan without having to qualify for a jumbo loan, which comes with more restrictions and tougher guidelines. Buyers can actually get a larger loan amount going into 2017, and it's really opening up doors.
If you have any questions for Brandon, you can give him a call at (818) 256-4330 or shoot him an email at BMoss@PrimeLending.com.
If you have real estate questions, give us a call or send us an email. We look forward to hearing from you.
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