Interest Rates/Refinance

[dmccarty]

Just a heads up for TBNers....

I noticed right around XMAS that the mortgage rates had dropped under 5% for a 30 year mortgage!

I thought when I got a 7% loan on my old city house that I was getting a deal. I could not buy a house in the mid/late 80s since the interest rates were 10-12%!

We have been following the rates pretty closely since XMAS and they have bounced around from a bit over 5% to 4.75%. Some of the gossip aka news reports are talking about rates towards 4%. I have seen other reports that have said no way were rates going to go to 4.5% and you would be lucky to get 4.75%.

Last week the Farm Bureau and our Credit Union had 4.75% mortgages.

The wifey went to our bank last Friday to just get information about a ReFi, closing costs, rates, etc and long story short we have been approved to refi with a 4.5% rate! Which is just unreal to me.

The savings for us amounts to a tractor payment.

The appraiser will be out to the house on Friday. The appraisal will be the only stumbling block at this point. My area has not been in much of a housing bubble but the loan office said that appraisals are on the low side. Whatever that means. Our house will be tough to appraise since its not a cookie cutter house so it will be interesting. Getting our building loan the appraiser the bank hired was incompetent. He valuation for our land was $6,000 and acre. A lot in the subdivision to our front sold for $20,000 and acre. We had a discussion with the bank and got a new appraiser.

So if the valuation is not an issue then we will have a 4.5% rate on a 30 year mortgage. The closing costs are $2,500ish with a 1% origination fee. That fee is a big ouch!

New Reports/Gossip says that Congress might somehow prevent origination fees. Not sure how they would do it and how they would prevent the bank from moving the fees around. A percentage origination fee is nuts though. Same amount of work for a 10,000 load or 100,000...

There was a local gossip/news report that one of the builders groups wants the Feds to get mortgage rates to 3%. I don't think we will see that rate go that low.

Other gossip reports says the rate should drop towards 4.5% or maybe a tad lower towards the end of the month.

So check the rates in your area, it might be worth a ReFi.

Later,
Dan

[WBWI]

That's great news! 4.5% is an awesome rate, but the cost seems high. We're refinancing our "new" home that is at 5.75% and we locked at 4.875%. It was about a $260 savings per month. Closing costs will be in the $1200 range.

I've talked to a few of my coworkers that are chasing that 4.5 - 4.75% rate. They may get lucky or that may lose the bet and find that rates jumped back to the 5% range. I'll take any rate under 5%.

[BungeeII]

Originally Posted by dmccarty

Just a heads up for TBNers....
So if the valuation is not an issue then we will have a 4.5% rate on a 30 year mortgage. The closing costs are $2,500ish with a 1% origination fee. That fee is a big ouch!
Dan

We just tried to get a 4.875 loan @ around 1500 closing.

Here in Michigan, the only homes selling are those at Sheriff's auctions. Needless to say, that's terrible for valuation. Of 4 comps near our home, you're looking at 3 auctions and an estate sale on the cheap. So, no re-fi for us.

[JB4310]

My neighbor just refied at around 4.5% also, he went from a 30 year to a 15 year.
He was putting an extra $100. towards the orig mortgage, now with the lower rate and even having the 15 year vs the 30 he's paying the same, counting that extra $100. but he knocked 15 years off.

I've got to look into mine, I got a home equity loan a few years ago at what was a great rate, I think it was 4.9% I wonder if I can do any better.

I think they will go down even more though, seems to be the big push to get homes selling again. I heard a while back that in Japan the rates are near zero? don't know if that can be true.

[dooleysm]

I saw a 3/1 ARM at the local credit union a couple weeks ago for 3.875%. We're at the point in our mortgage where most of the interest is paid off. I ran the numbers and even that 3.875 would only save us about $1600 vs. our current 5.75. Most, if not all, of that would get eaten up with closing costs.

If I didn't have 2 young kids with another on the way and my wife quitting her job in May I'd be out buying rental properties. I've been trying to talk myself into it, but I just can't bring myself to pull the trigger.

[dooleysm]

My BIL got a home equity loan at 4% about a month ago to build a detached garage/workshop.

[Chuck52]

A friend has a sister in the mortgage business who keeps him informed of the best deals she sees. He's getting a 30 year fixed at 4.25% from some bank in Nebraska.

Chuck

[dmccarty]

I think our closing costs are high but they are inline with the banks in the area. We checked. The guestimate we received from the Farm Bureau bank for closing costs was higher than what we are paying and the were at least .25% higher on the rate.

My two cents is that the rate is going to go a bit lower. But how much lower is the big dollar question. 4.25? 4.00?

My trigger was if we saw 4.5 then we would take it. People loose money trying to time the market when to sell. I don't want to loose money trying to time the mortgage market to get the absolute best rate.

A bird in hand is better than two in the bush.

Later,
Dan

[BigE_]

I've been checking into this as well. I'm at 5.75%, can get 5.25% with no points or 4.75% paying points. I told the mortgage broker to hold off until it is 4.75% no points.

I'd love to get into a 4.25% rate, but I'm betting that's paying quite a bit in points...

[2manyrocks]

Credit scores factor into this. Some of the people who have "good" credit scores, didn't get the best rates because credit standards have tightened up so much. I saw something recently about credit scores and the speaker said some things I didn't know before. He said that the longest held credit card count more towards the score than a newer one. Also said taking out new cards and cancelling old ones could hurt the score. Missing payments is a score killer. I'd have to look for my notes on this for the rest of what he said, but generally he said if you are planning to take out a mortgage in the next few months, to really pay attention to what you are doing with your credit cards and other debt.

If anyone is interested, I'll try to find my notes on this.

I've dealt with appraisers for the last several years, and you'd be shocked at how few of them come close to a realistic appraisal. If you have comparable sales you want them to consider, better point them out. Otherwise, they may pick a property two miles from you that isn't comparable, and use it as a comparision just because they have it and it's convenient to them to use it and not dig for true comparisions.