Home mortage rate direction?

[Gale Hawkins]

Ken you nailed the main concern of the down grading of our credit rating. Any up tick in rates will eat more of our GNP going and coming. If it hurts businesses then tax income will be down right when government cost of borrowing is going up causing a double whammy.

 

[dmccarty]

Kinda scary how TBN threads match something I was thinking about....

Over the weekend, I checked Mortgage Rates Credit Cards Refinance Home CD Rates by Bankrate.com, and the 30 year fixed rates. The overnight averages had gone down to under 4.5%. Just checked and they are at 4.33%. The website has adverts for 4.0x% 30 year fixed but who knows what the fine print says on those loans.

I read that it can be very hard to refi which is what TBNers are saying. We locked in a 4.5% mortgage a couple of years back. If it goes to 4.0% we likely will refi again. Or try too. At some point the rates have to go back up. I remember not being able to afford a house because of 10-12% rates and being tickled pink when I bought a house a decade later and got a 7-8% rate. Getting anything less was just amazing.

But I am afraid the rates are going to jump back up like we had in the 80's and early 90s.. Back in the mid/late 80s, the Feds were paying around 200 billion dollars on interest payment on the debt. It was a huge chunk of Federal expenses. At the time the Navy had 14-15 aircraft carrier groups. The only way I could get my head around 200 billion dollars was that we could have bought about 10-20 carrier groups with what we were paying in interest on the debt. Each year.

I did check what the Feds are now paying in interest and it was a very small amount in comparison to overall expenses. The low interest rates are helping the Fed budget as well as mine.

When the interest rate balloon goes up it is gong to get interesting....

Later,
Dan

 

[Pirate]

My bank has a 3.125 (15 yr conform). Not sure if I should try again. I have a 4.0 15 yr.

 

[two_bit_score]

After Friday's S&P downgrade of USA debt and this morning down grading of Fannie Mae, etc debt rating some are saying get rid of variable rates and get into fixed rate home loans.

Any one with long term experiences in home loan rates. I know in 1981 CD rates hit near 20% right after we got married.

Personally, I was hoping the rates would jump. I'd love to be getting 10-15% on CD's. More would be better. I miss the old days of Carter money wise.

Back in the 1980's people were buying today because tomorrow the rates would be going up and they wanted to get their rate locked in before it went up. Made some Good money. If you could pay cash you could get some deals too because sellers were worried that people could not get financed.

But the Fed has announced that in order to prop up Obama they will keep interest rates low until this time in 2013.

This president has needed more propping up than anybody.

 

[two_bit_score]

My bank has a 3.125 (15 yr conform). Not sure if I should try again. I have a 4.0 15 yr.

I am looking at buying a truck and got ok fir a 1.99% rate. Was going to pay cash but thought if the rates went up it would be good to leave some on the bank and take the low rate loan. Now that the Fed is promising to keep the rates low until after the election not sure.

 

[Bird]

I am looking at buying a truck and got ok fir a 1.99% rate. Was going to pay cash but thought if the rates went up it would be good to leave some on the bank and take the low rate loan. Now that the Fed is promising to keep the rates low until after the election not sure.

That's kinda where I am . . on a much smaller scale.:laughing: I bought a little Toro ZTR and the dealer had GE Money finance it at 1.99%. And I've been trying to decide whether to just make the payments or pay it off. It's a 3 year financing and 3 year warranty on it, and I still can't decide which would be best.:laughing:

 

[randy41]

seems to me that if you are earning less interest than you are paying than you should quit paying.

 

[ultrarunner]

seems to me that if you are earning less interest than you are paying than you should quit paying.

I went through the same on my Mortgage... decided in uncertain times it was good to have some cash in reserve...

It is hard to pay 3% when I get less than 1% in the bank... but, mortgage interest is deductible.

 

[Bird]

seems to me that if you are earning less interest than you are paying than you should quit paying.

Of course you're right; depending on how much cash you have in reserve and whether you think interest rates might go up.

 

[lockhaven]

Gentle men, I do not know what China is up to, but rest assured they have a plan. I am a designer of everything from body piercing parts to things used on the space shuttle. I design molds and the parts and I know that some of my customers are paying less for a mold that produces their parts then the mold shops that I design for here in the US can buy the steel for. Having China holding our dept is dangerous.

 

[riptides]

Gentle men, I do not know what China is up to, but rest assured they have a plan. I am a designer of everything from body piercing parts to things used on the space shuttle. I design molds and the parts and I know that some of my customers are paying less for a mold that produces their parts then the mold shops that I design for here in the US can buy the steel for. Having China holding our dept is dangerous.

Not really, one can opt to NOT pay. It is pretty simple.

 

[StanR]

I do not think we will see a big increase in long term rates. Higher rates would slow the already hard hit real estate market. with a ripple effect over the entire ecomony. 98% of the time, bad news is good news for the long term rate market. Usually when there is a major event, rates change immediately. Today rates were in the same basic area they were late week. There are many factors involved but generally in the mid to low 4's. That is in the Texas market with a good borrower. They change a bit state to state.

 

[Ken45101]

Having China holding our dept is dangerous.

I'm not so sure of that. It could make us safer. China doesn't want to make us mad or start a war and risk losing all that money.

Would you risk upsetting someone who owed you trillions of dollars without collateral?

China also has to worry about our devaluing the dollar and paying them back with funny money.

Don't misunderstand. I don't trust the Chinese government. Just sayin', I'm not sure who has who over a barrel.

Ken

 

[two_bit_score]

That's kinda where I am . . on a much smaller scale.:laughing: I bought a little Toro ZTR and the dealer had GE Money finance it at 1.99%. And I've been trying to decide whether to just make the payments or pay it off. It's a 3 year financing and 3 year warranty on it, and I still can't decide which would be best.:laughing:

It would be nice to lock in some low interest financing or even better zero percent and then have interest rates climb on the money you kept in the bank.

Been so long since money in the bank was anything except a cushion or a bank roll to use for a good deal when it comes along that it would be nice to actually get paid some bank interest for a change.

 

[two_bit_score]

I'm not so sure of that. It could make us safer. China doesn't want to make us mad or start a war and risk losing all that money.

Would you risk upsetting someone who owed you trillions of dollars without collateral?

China also has to worry about our devaluing the dollar and paying them back with funny money.

Don't misunderstand. I don't trust the Chinese government. Just sayin', I'm not sure who has who over a barrel.

Ken

If you owe the bank a million dollars and can't pay. It you've got a problem. If you owe the bank ten million dollars and can't pay it the bank has a problem? :confused2:

 

[2manyrocks]

I had a bank lawyer say if a person was going to borrow money, they needed to get so deep in the bank that the bank couldn't do anything to them.

Friend of mine told me today she is covered up in mortgage refi applications.

We have had the Fed easing the money supply and holding down interest rates for quite some time now. How much longer can this go on? Especially now that inflation is rearing its head.

 

[Gale Hawkins]

Two years per the feds today to reverse the stock market slide.:thumbsup: