Rates to Continue Low Trend 2012

Costa Mesa interest rate should continue with the lower rates that we saw much of last year according to experts throughout the real estate community. A recent LA Times article points to the fact that they think rates should continue to be in the mid 3% to mid 4% range through the year, but not many people will take advantage of what is out there. So Rates to Continue Low Trend 2012 hopefully.

Re-fi Fever

Last year was a year of refinance for the lending industry. 4 out of every 5 loans originated were refinance loans, leaving only a shocking 20% of lending being done for new purchases. If you hung around the lending game long enough, I’m sure you had a great last year as a loan officer.

Time to Buy?

As I mentioned in my opening post for 2012, I think it will be a great year for Costa Mesa real estate buyers. More low prices, especially on the entry level, and more low interest rates. Of course you need the right fundamentals to buy in Costa Mesa real estate – decent or better credit, a little bit of money to put towards a purchase, and the right income for the level of home you are trying to buy.

Beats Renting

Recently (as in this week), there were two homes that went on the market in the state streets in the Mesa Verde area that were both in the high $300,000s! No joke, those are the lowest prices that have been in that neighborhood in a quite a long time, probably before 2002. I will put them here at the end of the post – they will sell quick though.

I think there will be more of the same – as an entry level buyer you can expect to pick up a pretty good house certainly in the lower $400,000s and quite possibly in the higher $300,000 range. Look at payments on those homes:

$425,000 purchase price = $1575 payment!!! (with 20% down @3.75%)
$385,000 purchase price = $1426 payment!!! (with 20% down @3.75%)

Even with an FHA loan that allows 3.5% as a minimum downpayment, you are way, way ahead of renting. Renting either one of those home scenarios would surely cost you at least $2500/month in Costa Mesa. There will definitely be some investors swimming those water because these investments are so cash flow positive now.

Looking for a great home in Costa Mesa? Or need a lender (I can refer you to)?

Call Colin Delaney at (714) 743-9882 or E-mail me here.