San Diego Mortgage Rates
Mortgage Rates in San Diego
How to get the Lowest possible rate on a San Diego Mortgage:
#1. It’s all about Your Mortgage Professional.
The person who is going to make the decision of WHEN to “Lock” Your loan. Rates change throughout the day, but at some point, the Mortgage Professional has to make a decision to finalize Your rate. Do they know what they’re doing…? Ask them about the Mortgage Bond Market. How are Bonds trading today? Up or Down? How have they been trading the past week or the past month? What is Your opinion about the future of Mortgage Rates? If they don’t give You a passionate opinion or can’t at least answer intelligently, then run like the place is on Fire. Especially if You get a very “dodgy” answer like, “I don’t have time to track the bonds all day, but I have people who do it for me…” Of course they won’t have time to track Mortgage Bonds all day, but that’s not the point. The point is, how do they react? You’re hoping for an answer like this, “Well, this morning bonds were up just a little, but I haven’t looked since 10am. There hasn’t been a Price-Change today, so the market is pretty flat. Over the past few weeks it’s been wild. We’ve seen rates move up almost half a point and then move all the way back down to where we are today. Personally, I think….”
MAKE NOTE: If You’re working with a Big Bank, the Locking process is part of a “procedure”. Meaning, they will lock Your loan at a certain point in the loan process regardless of whether it’s a wise move to make or not. This is obviously a random success/failure proposition. You DO NOT want to work witha Bank that has the locking process set up as a part of their Procedure.
#2. Do NOT look at the Mortgage Rates You see listed on sites like Yahoo and BankRate.
Those Rates are Nationwide averages from the PREVIOUS week. They don’t mean anything to someone looking to San Diego Mortgage. Shop different local Companies if You want, but please don’t look at Past rates and think that has anything to do with Today, the future, or what You qualify for…
#3. If You like it, Lock it.
When You get the initial quote along with the preliminary Loan Application, if You like the rate and payment listed, ask Your Mortgage Professional to go ahead and lock in the rate. If the rate is not locked and You are “floating” throughout the loan process, You could find Yourself worrying about it day and night. Not to mention, if something catastrophic happens in the Bond Market and rates go up 1% overnight, then You lose big time and might not even be able to afford the home anymore. Ask to lock if You like the terms and rest easy.
Mortgage rates in San Diego are always going to be different than what You see on the National News. There are adjustments to the Mortgage Rates offered by Banks based on different Statewide-statistics regarding: Loan Amount, loan performance history, and State Laws.
The average San Diego Mortgage is almost $400,000! You could buy a Mansion for 400k in the Mid-West! Doesn’t the Bank WANT the bigger loan amount so they can make more money? No. The Bank is focused on minimizing Risk. So which is more risky, having 4 different loans for $100,000 or having just one for $400,000? If You have 4 loans, then 1 default only costs You 25%. If You have just 1 loan and it defaults, You lose it all. It’s the most basic and unilaterally agreed principle of investing…Diversify. Simply put, don’t have all Your eggs in one basket. Having big loan amounts was only a good thing during the Housing Boom, when everyone was “Loan Drunk”. Now, as the Banks go back to basic lending and banking principles, larger loan amounts are going to be penalized because they carry more risk than smaller ones.
Recently, the loan performance History in California has been the worst of any State in the Country. (See below image) Meaning, Homeowners are seriously delinquent on their home loans at a rate greater than any other State. Unfortunately, this will continue to be a burden for San Diego Mortgage rates. The Bankers haven’t started to use this excuse yet, but they will. I’ve never seen a Bank pass up using a legit excuse to charge people more money. Once everything cools down in the Foreclosure market and the Banks are going to the Government less and less for funding and aid, the cavalry will be released and things will change for the Consumer, this will be one of them.
There are many states that have specific laws that prohibit or encourage certain Banking activities with respect to the creation of new Mortgage Loans. The State of California, along with several other states, is a “Non-Recourse” State. If You buy Real Estate in San Diego, and You don’t refinance the loan(s), then no matter what happens, You have no personal liability for those Mortgages. Meaning, if You do a Short Sale or Foreclosure, the Bank can NOT sue You for the amount owed after they liquidate the Property. In the past 10 years, there was so much Refinance activity, the Banks haven’t really felt the pain of this yet. However, recent legislation like Senate Bill 458 isn’t helping at all… Eventually, the Banks will use this reason to increase San Diego Mortgage rates, there’s no question about that.
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