California Guide

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Factors When Investing In California Real Estate

California is a beautiful state with a great many reasons why one might want to live there. However, as with any major decision there are a number of factors to consider when looking at investing in real estate.

Factors to consider in 2015 include the interest rate and government subsidy opportunities. There have been interest rate changes (The FHA monthly rate was reduced, for example) and there will in all likelihood be more. Locking in a fixed rate mortgage in the current climate with favorable rates is definitely a smart move if you are looking to buy in California during 2015. Rates seem to be stabilizing close to 3% and several are predicting even more decreases which can only really lead to house price increases, again suggesting that now is a good time to invest in real estate in California.

Another potential upside to investing in California real estate is the probable reform of stated income loans. As a smaller business owner or potential buyer who cannot provide payslips as evidence of income, these might serve as a way to get on the property ladder although the interest rates and down payments are a little less attractive. On the other hand, the existence of these loans and their popularity with buy to let investors will again lend upwards pressure to prices in the medium term.

Ultimately, home equity loans are a very safe choice because you are, when all is said and done, investing in real estate which is inherently attractive. Yes, if your financial situation is fluid then you will need to work out some of the advantages of variable rate mortgages, but ultimately if you can come to some certainty on your next few years’ income then an equity solution is probably for you.

Of course, all of the above in no way represents legal advice and the best thing you could do is take all of the necessary advice you need before making such a key decision.

Before you do, it is probably worth looking at exactly what types of loans exist and which ones might apply to you. Of course this depends on your specific situation. A selection of the main loans out there includes:

Home Affordable Refinance Programs (“HARP”)
So-called HARP 2.0 schemes
Veterans Affairs loans,
FHA loans
Jumbo loans,
reverse loans (sometimes called “second mortgages” where the vendor fronts some of the dowpayment)
first time home loans
USDA loans,
CalHFA loans
Chdap loans – a deferred payment, simple interest rate junior loan
Other Calhafa loans.

I hope the above has been useful and wish you well in your California real estate adventure!