While certain places in California are having issues with home affordability, things are looking pretty good for the state as a whole, considering that foreclosures and mortgage delinquency rates continue to drop. Central Valley Business Times draws this conclusion and references the most recent California housing figures from the financial information company CoreLogic Inc. The following statistics are from the Sacramento metropolitan statistical area, which includes Sacramento, Yolo, El Dorado, and Placer counties:
- The CoreLogic data reveals that the rate of metro Sacramento foreclosures among outstanding mortgage loans was 0.58 percent in August, a decrease of 0.36 percentage points compared to August 2013 when the rate was 0.94 percent. Foreclosure activity in metro Sacramento was lower than the national foreclosure rate, which was 1.61 percent for August 2014.
Also in metro Sacramento, the mortgage delinquency rate decreased. According to CoreLogic, 2.17 percent of mortgage loans were 90 days or more delinquent this past August compared to 3.33 percent for August 2013, representing a decrease of 1.16 percentage points.
- Even with such promising numbers and low mortgage delinquency rates dominating the local housing market, buyers still need to conduct due diligence and find out the best way they can obtain affordable loans. After all, real estate markets can be rather volatile, and things can change for the worse when least expected. In view of this, some first-time buyers may skip the standard loan products and go for an FHA loan instead. These loans, which are backed by the Federal Housing Authority, incur smaller down payments (currently about 3.5 percent) and have less stringent credit and income requirements.
Although people with credit scores as low as 500 can apply for FHA loans, there is no guarantee that they automatically qualify. For this reason, it would be best to consult with trusted Sacramento mortgage companies such as West Coast Mortgage Group to see whether or not they meet the FHA’s standards.
Meanwhile, for those with existing mortgages who are having difficulty with their payments, refinancing can be a viable solution. Aside from being able to arrange for lower home loan payments, homeowners may refinance their mortgages to help pay for another large expense, such as a child’s college education or a major home renovation. However, since refinancing a loan still involves paying for home appraisal, title insurance, and other expenses, homeowners must be absolutely sure that they can shoulder these additional costs.
Things are looking up for California’s housing market at present. All the same, homeowners and buyers can benefit from the expertise of seasoned Sacramento mortgage professionals when it comes to figuring out the best way to forward.
(Source: Foreclosure rates plunge in California, Central Valley Business Times, October 23, 2014)