Napa's Loan Ranger, Chris Salese: The GOAT

To top it off, this year’s upcoming Super Bowl will feature perhaps the greatest NFL quarterback of all time, also known as the “GOAT,” matching up to who will likely become the new GOAT before the end of his career.

If that wasn’t enough, this year’s Super Bowl will be the first ever played during a pandemic and by the first team in NFL history to play in a Super Bowl hosted at their home stadium. What a start to the sports year of 2021.

The first month of this new year has seen the continuation of the greatest home loan conditions of all time.

Obviously, the way these conditions have been created is sad and not good for so many people, but the opportunities for current homeowners and prospective homebuyers have never been better.

I hope that those who are fortunate enough to be able to take advantage of these conditions can give back to support their local communities as I wrote about in my last column.

One of the reasons why home loan conditions are the greatest of all time is the rate spread. The traditional wheel of amortization terms such as a 30-, 25-, 20-, 15- or 10-year fixed-rate mortgage typically comes with a much larger interest rate spread between each of these terms compared to where rates are at today.

Yes, you will still see home loan rates a bit lower on the shorter terms of either a 15- or 10-year fixed. However, the rate differential these days between the 30-year fixed and the 10-year fixed is super compressed.

This means borrowers don’t feel the pressure of having to tighten up their budget to track down the slightly lower rate on a shorter amortization term.

Don’t get me wrong, there are plenty of benefits of signing up for a lower rate on a shorter repayment term, but that doesn’t have as wide of an appeal as the payment flexibility you can enjoy on a 30-year fixed repayment term while also locking in what could be your once in a lifetime home loan rate.

Another reason today’s market conditions are the most amazing of all time is the recent run-up in home equity that many areas have seen due to the shortage of inventory of homes for sale.

Coupled with Fannie and Freddie increasing their maximum loan amount up to $816,500 for Napa County, that’s a ton of money you can borrow as a current homeowner while keeping your monthly payment manageable via today’s ultra-low home loan rates.

If you are a buyer, that’s a lot of house you can buy with this higher loan limit, nearly an $860,000 purchase price with only a 5% down-payment, if you want to use conventional financing with Fannie and Freddie. This gives you more buying options and helps you stay competitive in a market with limited supply.