Why You Should Refinance Your California Home Loan -- Now!

Real Estate Market Condition in California The economic crisis has brought increasing instability to the Unites States real estate market and the same thing can be said about California. Getting a mortgage for home purchase is seldom troublesome for the buyer due to the increase in value of developed and undeveloped land. California has always been one of the most expensive places to reside in and their properties are always first class. But since the economic crisis caused an uncertainty in the market, the credit slowdown offers a financial benefit for the homeowner to refinance their loan.

Prime Rate at its Lowest Although the economic crisis caused a sweeping fall in the price of California homes, the Federal Reserve decreased interest rates. Prime rate - the rate of money that banks lend each other and serve as a source for the interest rates of loans - currently rated 3.25 which is the lowest prime rate in record since August 1955. The incredibly low interest rate gives the California home owner the chance to refinance their home loans. However, change is unpredictable and can happen anytime. The opportunity may not last long.

The Current Trend in California Home Sales While home sales in California decreased slightly, less than one per cent, from January to February of 2009, in February 2009 nearly forty-three percent (43%) more homes were sold than in February 2008. Additionally, the ten-month trend of falling home prices came to an end in February. Home equity is on the rise; interest rates are projected to increase as a result of President Barack Obama's economic stimulus. Furthermore, Treasury Secretary Tim Geithner's proposed economic reforms suggest the favorable climate for the home owner to refinance their mortgage is likely to change.

Flexibility Another reason for the California home owner to refinance their home loan is that it's also a chance to reduce the amount of monthly mortgage payment and it increases the amortization or pay back period.

A reduced monthly mortgage amount enables the home owner either to invest the saved income in more lucrative, current assets, or simply to reap the benefits of additional disposable income--California homeowners are offered with flexibility when refinancing,. Thus, the homeowner benefits from the increased financial freedom of a lower, refinanced mortgage, while remaining comfortably in their California residence.
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