OT: Mortgage Interest Rates
 

For any of you loan officers/mortgage brokers out there, what are the interest rates doing right now with the stock market in the toilet? I have heard in the past that when the stocks go down, often the mortgage rates drop as well. Might be time to convert that 3-year adjustable to a fixed rate.

Thats pretty close to where we were today, for loans over $200K in conforming we could do an 1/8th better.

Jumbo's were right on. If you have a convertable arm, you are probably better off refinancing, most convert to 1/4 to 1/2 over the current going rate.

I can't wait...
 

I need to lock my mortgage in right away!!!!

just got an accepeted offer last night... inspector comming tomorrow... Now all I need is to lock in my mortgage... I hope the rates hold out a little bit longer...

:D :D

Just refied $350,000 at 5.66% 0.5%point amor 30yr but with biweekly payment=24 years total.

ive got a question for the finance guys out there.

credit card company is offering a home equity loan at 4.75%
my mortgage has 5 years left at 7.5% and its paid off!!
can i pay off my mortgage with the home equity loan?
is the interest acruid the same way?

Online Refinancing?
 

Cobra Marty,

Where did you get a that rate? Has anyone dealt with online mortgage brokers? Good or bad experiences?

Von Bongo, my ARM converts right now to a 30 yr @ 6.625%, which is 1/8 over the normal rate offered by this institution. It will cost me $250 to do this. How much should I expect to pay for closing costs if I refinance instead? I was thinking about rolling up some other (equity line of credit) debt into the loan amount. BTW, we just bought the house back in January. I got the ARM because the rates shot up to 7.25% at that time, with the intention of converting if they dropped again. Need to check to make sure that there is no early payment penalty.

Thanks for the info, guys!

An even better question is what are the boat loan rates doing now?....I know I'm getting flyers out the yahoo on credit cards that are offering balance transfers at ZERO % for 12 months...

Yea I responded to one of those spam emails and got several calls.

Call Tom at Allpointe Finance at 1-866-214-4810 ext #16, the program is with World Savings, up to 75% LTV. Cost appraisal, ?other fees, title ins. He will go over it all. Tell him I refered you.
Martin Pasqualone. Good luck. 5.66% deductible is allmost free money.

If the rate is not a teaser rate and if you don't have to pay a lot of costs. On 5 years it will save you $1.28 per thousand loaned, so if you owe $20,000 it will save you 25.60 per month in your payment times 60 months for a total savings of $1536.

You would have to do the actual math.

Our rates are 6.375% for a 30 and 5.75% for a 15. Both fixed rates.

Budman, I have financed several people that started to work with online "brokers". 99.9% of the time they offer great rates to get you interested then you show up for the closing and the closing costs are outrageous. They always advertise super low rates with .5 or 1 point. But they fail to tell you that they charge about $5k in closing costs. I am always here for my customers, both before and after. Try getting some answers to your port-closing questions with an online company.

Cobra Marty, I would read the fine print on that rate for a 30 year term. I haven't seen anything close to that for a FIXED rate.

Loto Party,

Ask the right questions and read the fine print on the home equity. It MAY be a good way to go. Keep in mind, home equity loan rates are not fixed, they move with the prime rate. So it may be great now but in 2 years not so great. Find out how they adjust to prime and for how long(a lot of places offer "introductory rates") and their max adjustments.

Re: Online Refinancing?
 

That rate is a little high on the conversion, today our rates for loans over 100K on 30 years is 6.25% with no points or origination fee. Most consumer transactions have no prepayment penalty. The difference from 6.625 to 6.25 is $0.25 per thousand per month so if you owe $100K it would amount to $25/mo in your payment. YOu need to look at the savings compared to cost and how long you will live in the house. Lets assume you have to get a new appraisal and title work along with misc costs and say it costs $900 total to refi, less the $250 you would be charged to convert makes your difference to refi over convert $650 divide that by $25/mo savings and you get 26 months before you break even, if you are going to stay there for 7 years and don't forsee rates going lower then the refinance is better than the conversion.

Ok all you mortgage types, I have a simple question. At least I think it's simple. How much lower than my current rate would I need to find before it's worth it to refinance? Currently, I have around 200K at 7% on a 30 yr. fixed. Just trying to see if I can save myself some bucks with all these low rates I see flying around.

Marty that is a great rate did you have to pay an origination fee? Or average closing costs on a jumbo are about $1000.

We sell to Nationwide, Principal, Washington Mutual and a few smaller ones and they aren't anywhere near that for a 25 year fixed on a jumbo, heck you can't touch that with Fannie or Freddie on a 25 year conforming with a half point. I would be interested to know more details.

The way I work it with my customers is this:

It costs on average $800-$1200 to refinance, so lets take $1200 as an example. I can get you 6.25% today maybe 6.125, but lets be conservative. The difference from 7% to 6.25% is $0.50 per thousand borrowed per month. On 30 years for you it saves you $100 per month(200 X .50= $100) over your current loan. Divide the savings of $100 into the cost $1200 and it would take you 12 months to recover your costs so if you live there 13 months it's a benifit. Now we also usually look to see if we can shorten your term and keep you payment the same for example on a 20 year loan I can get 6% today so you have a principal and interest payment on $200k of $1434, how does that compare to your current payment (remember to exclude escrowed taxes and insurance when comparing payments, IE compare PI to PI, escrow amounts will not change.) Also when did you buy the house? Did you put down less than 20% and therefore have PMI insurance that you might also be able to get dropped?

There is no exact rate, the rule of 2% or 1% really aren't valid, you need to compare cost to savings and see if the benifit is worth it to you.

Hopefully this helps.

Von bongo - that does help - thanks a lot. We just bought this house in December, and I pretty much guarantee we'll be here for a while. (Especially since I'm just now putting the final trimwork into the new kitchen.) Sounds to me like it's worth it.

If it is that new, call your current mortgage comapny and ask about refinancing, many have a streamlined program for loans less than one year old and you may be able to save some closing costs!

Von Bongo has pretty much hit the nail on the head with all replies.

I agree with the rule of thumb of 1% savings to justify re-fi is not accurate.

I had a situation yesterday to re-fi a guy from a 8.125 fixed 20 that he only had 10 years left on and to do a 10 year at a much lower rate. ( I htink I quoted like 5.75 but i cant remember) It didnt benefit him by the time i rolled in the third party expenses.

What I do for my customers that have a short time to go on their loan is take their monthly payment and multiply it by the number of payment s remaining. Then I take the proposed loan amount and multiply it by the number of payments. Subtract proposed amount from their current loan and compare it to the cost of the re-fi.

Here is an example I had saved on my computer from a past customer:

I have compared your current loan to the proposed loan. You stated that you current loan was for $70,000 at 7.5% for 15 years. This would mean that your principle and interest payment would be approximately $649. Your new principle and interest payment for 10 years would be $742.

Therefore, to pay off the remainder of your current loan would cost you approximately $93,456 ($649 x 144 months). The proposed loan would cost you approximately $89,040 ($742 x 120 months) plus $1200 in closing costs for a total of $90,240 .

So, you would save approximately $3216 ($93,456-$90,240) and have your home paid off 2 years sooner.



There are other factors that can be added but I like to keep it as simple as possible. In this case I recommended that he keep his original mortgage and just pay $742 a month and the $93 additional principle payments would allow him to pay it off sooner and save some money. Keep in mind this is old so it has nothing to do with the current rates. In fact, I should figure it again and call him!

:D

How about 1 month Libor based ARM at 3.375% Interest only the first 10yrs. Can't beat it.

thanks Von Bongo and Blackhawk.

its a fixed rate at 4.75% as long as i transfer a balance of 25k.
no application fee or closing cost!
only thing i dont know is the term of the loan?
if its at least 48 monthes seams like a good deal.
might even borrow enough for a truck too.
:D

Budman , sorry to jump your thread.

No Problem! Just like to see the info being shared.

Von Bongo, JJ, BlackHawk, and others who would like to chime in, I know no one can read the future, but what are your feelings regarding the direction of the rates. Do you think they have bottomed, or do you think they might drop some more? Either way, I think now is a good time to take action!

lotoparty, usually helocs are variable rate loans. A true heloc is also not ammortized for any term. They are interest only payments usually due in 15 years. But, obviously if you make interest only payments you will never pay it off. I usually give my customers a "target payment" so they can have it payed off at their desired date. Just make sure it is a true fixed rate(and for how long) and it sounds like a good deal! Just watch out, some credit card companies have fine print stating that if you ever make a late payment your payment will go to __%. I know we never make late payments, but accidents happen. And when they say late, sometimes they mean ONE DAY late.

Like I tell my customers, if I could predict rates I would be a millionaire!!! :D And I am not.

My personal opinion is they have come close to bottoming out. I can't see them going down any more than a another 1/8%. I think there may be a day here or there(or half day) when they are a little lower. But for the most part they are there.

But, like I said, if I could predict rates I would be out on my new 38' Donzi ZR somewhere instead of here working. :D

To expand on that, anyone considering a re-fi right now get the ball rolling with your broker or bank. Let them clear all of your conditions and then you can wait and see what they do. If there is a day when they go lower you can lock your rate that day and close quickly.

I agree if I knew where rates were headed, I'd already have that 42 Tiger on order.

It's hard to see rates going a lot lower but I also wouldn't be shocked to see them in the high 5's for 30 years. What I tell people is when you get a rate you can live with for 30 years go for it, your just as likely to hit the top as the bottom and if rates go lower (enough) you can always refinance.

I have to believe that over the next 30 years you will find very few times you would be unhappy with a 6.25% rate

Ok, we are just about to refinance. Actually the appointment to do the paperwork is tonight. His rate just dropped to 6.4 for a 30. According to your crystal ball should we hold out a bit longer or lock in?

What exactly are mortgage rates based on?
 

Seems like I remember it being based on one of the long term bonds, but I don't recall which one. When we bought our house in January, the mortgage rates seemed to follow the stock market - when the stocks increased, the mortgage rates seemed to rise as well. Why?

Just saw that the market gained 300 points today. Hope that doesn't mean the low interest picnic is over before I can lock! :eek:

Cord, that's where I am at today (6.375%). However, I NEVER tell my clients what to do. If I tell you to lock and they go up, I'm your hero. But, if I tell you to lock and the go down, you hate me.

If your happy with 6.4 lock it in, if your willing to take between 6 and 7%over the next 60 days float.

Is the uncertanty worth gaining say 1/8th to 1/4 point? Are you willing to pay 1/4 more if your wrong? Only you can answer your tollerance for risk. One thing I also do when people ask me that is calculate the payement for them at say 1/4 lower rate and see if the possible savings is enough to take the chance on.

Like Blackhawk says, I never tell you what to do. I just give the facts as they are today.

Budman, I will try to give you an answer to that. Although I don't follow that "side" of it too much, I just look at the cause and effect.

When the stock market is doing poorly the bond market is typically stronger because people start pulling money out of the stock market and investing in bonds. Mortgage rates typically follow the 5 year bond market. So, when the bond market is strong rates are lower.

That's how I understand it anyhow. I am sure someone can expand on it though.

Von Bongo is right. Calculate the difference in payment and YOU figure if it's worth the risk.

As blackhawk stated That is my understanding of how they are effected.

JBK could probably shed some light I am surprised he didnt chime in yet.

Cobra Marty someone earlier mentioned to read the fine print on your loan. I would be interested to see if it is a negative ammortization or not.

I'll try posting this again.

Here's what I got;
processing $350, appraisal $310, title ins $2083, origination=0.5%=$1725, underwriting fee $495, at home closing $225 ALL TOTAL = $5388.

For $345,000, 5.66% 30fixed = P+I = $1993/mo but half paid every 2 weeks = $996.50/2weeks for 24 years. Or $25,909/yr and $621,816 total paid.

Now can someone with a financial calculator plug in for me the following numbers; principal value=$350.388, payment=$2159.08/month, term=24years. What is the interest?
This is my true interest. Thanks.

Cobra;

Should be 271,427.00

Oops I did that wrong. I ment $345,00 - $5388 = $339,612 = principal value(the amount I actually recieved), $2159.08/mo payment, 24 year term. What is the interest? Thanks.

What should be $271,427?

How can it be negative amoritization? The balance would keep going up and never get paid off.

OOPS there is a lot of that going around....

Cobra when I plug the numbers in I get the following payment;

$2,158.50..the slight difference might be due to rounding

The total INTEREST you will pay is 282,036.00

Your TOTAL PAYMENTS (P&I) will be 621,648.00

I found an online mortgage calculator and ran my numbers and it has an APR rate of 5.8261%.

Yea, I hear alot of "non commital responses" from people. Guess I'm just trying to get a feel from people who do this for a living. We are currently trying to lock our rate, but everybody has a bad case of the dragn' ass.

We took an 1/8th jump on 30 yr fixed rates mid day today.

As for the nrgative am loan I dont know much about them....I do know world savings pushes them heavily in this area.