Current 30 year-fixed mortgage refinance rates are averaging: 7.31%
The current average rate for a 15-year fixed mortgage refinance is: 6.76%
See whether refinancing makes sense for you using our mortgage refinance calculator.The current mortgage rates forecast is partially cloudy: There’s relatively good news for homebuyers watching mortgage rates in California, but not-so-great news for affordability in the state.
First, the good news: Rates aren’t expected to rise significantly over the course of 2024. Our market expert, Jacob Channel, predicts that 30-year rates could end the year near — or even slightly under — 6%.
The bad news is that we’re still in an affordability crisis and, unlike mortgage rates, home prices haven’t started moving in the right direction yet. Using affordability as a metric, California is also one of the worst states for first-time homebuyers.
However, Channel is cautiously optimistic, noting that if inflation continues to ease and interest rates move downward as predicted, the housing market may pick back up. If rates go low enough that more existing homeowners are willing to sell their homes, this could mean an influx of housing stock and increased affordability overall.
There are many factors determining mortgage rates—some that are in your control, and some that aren’t. Here are a few steps you can take now to get the best mortgage rate:
When should I lock in my mortgage rate?When you apply for a mortgage, lenders are required by law to send you a loan estimate within three business days. Once you choose to move forward with a loan offer, you should start thinking about a mortgage rate lock. This guarantees that the interest rate you received in your offer won’t change as you make your way to closing.
The California Housing Finance Agency offers programs for borrowers who want conventional, FHA, VA or USDA loans with fixed interest rates. Borrowers who can afford to take on a slightly higher interest rate with that first mortgage may want to use the CalPlus FHA program or CalPlus conventional program to access a zero-interest second mortgage that can cover closing costs up to 3% of the first mortgage amount. For additional funds, you can combine this with down payment assistance from the MyHome Assistance Program.
MyHome programs can be used with FHA or conventional loans and offer funds that can be used toward a down payment or closing costs. The maximum amount you can access is 3.5% of the home’s purchase price or its appraised value (whichever is less). The money comes in the form of a second mortgage that doesn’t have to be paid off until the home is sold, refinanced or fully paid off.
Administered by the CHFA, Dream for All provides a shared-appreciation loan program available for first-time homebuyers who need help affording a down payment or closing costs. “Shared appreciation” means you won’t have to pay the loan back until you sell or transfer the home. At that point, you’ll not only owe back the full loan amount, but an additional amount that represents a share of the home’s appreciation in value. You can borrow up to 20% of the first mortgage loan amount.
Borrowers must:
Be first-time homebuyers
Use the assistance in conjunction with a Dream For All Conventional first mortgage
Use an approved lender
Purchase a home in the state of California
Complete homebuyer education courses
At least one borrower must:
Be a first-generation homebuyer (at least one borrower)
Be a resident of California
People who have never owned a home
People who haven’t owned real estate in the last three years
People who have lived with a spouse in a home owned by that spouse at any time in the last three years may not qualify
Borrowers who have not owned a home in the United States in the last seven years and whose parents do not own a home in the United States (or didn’t at the time of their deaths)
or
Borrowers who have ever been in foster care
→ California conventional loans. For borrowers with strong credit and some down payment savings, a conventional loan is a very traditional option. Their minimum requirements are usually set by Fannie Mae and Freddie Mac, though some lenders set their own guidelines in order to cater to buyers with unique needs.
→ California FHA loans. FHA loan requirements give buyers with lower credit a more accessible option, allowing for qualification with credit as low as 500 if you make a 10% down payment. You can put down as little as 3.5%, though, as long as you maintain a 580 credit score.
→ California VA loans. VA loan requirements are even more forgiving than conventional or FHA loan requirements because they’re intended to help as many military service members get into homes as possible. You’ll need to have a qualifying military service record to access a VA loan.
→ Streamline refinances are for California homeowners who have an FHA or VA loan and want to refinance into another loan within that same program. FHA streamline refinance loans or VA interest rate reduction refinance loans (IRRRLs) allow you to do this with less paperwork and less hassle than other refinance programs.
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