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Creative Refinancing Looks Good in Los Angeles

By Joe Taylor Jr.
Local Lender Columnist
Mar 29, 2006
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As mortgage interest rates continue to rise, now is a good time to refinance your Los Angeles home to guarantee yourself a lower mortgage payment for years to come.

The Commerce Department reports that the median house price in California continues to increase at a rate faster than the national average. Therefore, refinancing your mortgage can unlock some of that newly acquired equity.

In Los Angeles County, the median price of a home grew nearly twenty percent from last year. Though analysts say that home prices may have reached a plateau, few experts expect home values to decrease any time soon, especially in the red-hot Los Angeles market.

Refinancing Maximizes Real Estate Gains in Los Angeles

If you have owned your home in Los Angeles for more than five years, you may qualify to eliminate your personal mortgage insurance by refinancing your home's new value. You can radically reduce your monthly payments and cut down the time it takes to pay off your mortgage.

Alternately, Los Angeles residents can now participate in "freedom loan" programs. You can refinance up to 125 percent of your home's value to pay for renovation costs. Your investment could pay off in a higher resale value.

If you plan to sell your home in the next few years, refinancing with an interest-only loan could decrease your mortgage payment. Though riskier than traditional mortgages, an interest-only loan can free up cash flow for a future down payment or moving expenses.

Refinancing Lets You Lock Today's Great Rates

Many analysts predict the mortgage rate in Los Angeles could pass 7 percent in 2006. If you missed last year's wave of money-saving refinancing deals, if you need to free up some of your home's equity, or if you want to get rid of a higher interest rate, now is the time to refinance.

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About the Author
Joe Taylor Jr. has covered business and finance news for Financial Times Television and CNBC. He coaches beginning mortgage brokers to provide better customer service and to understand creative financing opportunities.