As we’ve been pleased to point out before, Santa Barbara mortgage interest rates are not just ‘low’ – that would be like saying Michael Phelps is a ‘good’ swimmer. When you borrow at a rate below the inflation rate, you essentially borrow for free. Using someone else’s money to do a job for you is one of the less well-hidden secrets of successful people – so it should come as no surprise that some of today’s most prominent business names are right in there with everyone else, getting a mortgage that takes advantage of today’s environment. Only more so.
This is the basis for the (if you haven’t heard, sit down and take a deep breath) 1% mortgage rates currently actually being granted to some homebuyers. Such seemingly too-good-to-be-true rates are available only to those with exceptional credit and extremely high net worth. How exceptional and extremely? Mark Zuckerberg is a good example. The billionaire founder of Facebook recently refinanced his $5.95 million home in Palo Alto at a 1.05% interest rate on his 30-year mortgage. How in the world did he get this jaw-dropping loan?
The bank figured he was good for it.
Now, for those of us in the Santa Barbara area who do not (at the moment) happen to have a few billion in the bank, the current average mortgage rate for those with qualifying incomes and credit hovers somewhere north of 3.375% and south of 3.65%. That’s for those getting a mortgage at the 30-year fixed rate. But what about that 1% rate? If you are getting a mortgage in Santa Barbara anyway, why not shoot for the stars?
Well, my high-flying friends, keep in mind that applying for (and getting approved for) the 1% mortgage rate is not for the faint of heart. As mentioned, the applicant needs to have a very high income and net worth to qualify, and the qualifying process can be a bit intimidating. But if your first thought is, ‘I’ll just have my people handle it,’ you’re in the right frame of mind!
For the rest of us, the good news is that the Federal Reserve seems unlikely to alter the already exceptionally low rates that are available right now to everyone. We have about two to three years of low rates ahead of us according to analysts at Bankrate Inc., the private firm that tracks mortgage rates and trends. So getting a mortgage now puts us in the historic low range.
In case you have been thinking of buying or selling a Santa Barbara property, give us a call.
Year after year one of Santa Barbara’s top realtors, our office is here in Santa Barbara & Montecito to help with your Santa Barbara home search and Montecito home search.