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May 28, 2009
Interest rates
NYT says interest rates on 30-year mortgages went up to 5 percent today. Is this like those "average" gasoline prices of $2 or $2.30? What are the real rates for borrowers with credit scores over 750 buying houses in Brooklyn? And will they go up, when, and by how much?
Comments
I'm sure there is wiggle room on those, depending on income, credit score, down payment, etc...
Also, I'm sure you can still buy points to knock them down a bit more.
Give Lendingtree.com a try. You might be able to get a quick few ideas. But I'm sure in general it's less than a full point one way or another without buying it down...
Posted by: christopher at May 28, 2009 9:56 AM
From rock-bottom lows they can only go up. When: starting now, apparently. How much: who knows, but I would guess we are back to 8% mortgage money in the next couple of years.
If you have down payment and a good credit score, relax. Given the same after-tax cost I would much rather buy at a lower price and pay a higher interest rate. And that's where we are heading. Lower prices and higher interest rates. If you jump on 5% money now because you are worried rates might go up you could miss the bigger and more important shift to lower prices.
Posted by: lechacal at May 28, 2009 10:03 AM
...caveat, mopar: If you are really buying for the long-term (really really, not just really like you will actually sell in five years like so many people do) and you find a place and can afford the payments, than go ahead and jump on that 5% money.
Posted by: lechacal at May 28, 2009 10:05 AM
I'm with you lechacal.
Posted by: the chicken at May 28, 2009 10:13 AM
You'd be surprised, jackal, how many of us buy our homes because we want to live in them. Some folks on this site forget that, and spar over home buying as if it were just another investment decision.
Posted by: slopefarm at May 28, 2009 10:17 AM
I am trying to refi on a 30 yr 6% fixed on three family that I purchased in Jan. 2008.
Despite putting down around 23% with excellent credit and documented income, HSBC, my current mortgage co. says the y will not refi me since my income for 2008 was too low.
This is due to me showing a loss on my schedule E due to maintenance, repairs, mortgage %, taxes, etc. WTF???????
Everything is the same except I could be paying hundreds less each month, where is their incentive to refi?
Posted by: bmfesq at May 28, 2009 10:18 AM
slopefarm: not surprised at all. There are plenty of folks who stay in their homes long-term. But in my experience far more people sell after 3 to 7 years than claim they will when they buy in the first place. I think I can confidently say that home ownership tends to be a much shorter-term investment than the average homeowner believes when making a purchase.
Posted by: lechacal at May 28, 2009 10:22 AM
People who sell in 3-7 years typically do so to buy another home either relocating or trading. Its still a purchase primarily as a home and not an investment.
Posted by: daveinbedstuy at May 28, 2009 10:31 AM
True DIBS: But if you sell in that timeframe and prices have declined there is a dead loss you don't recapture on your next purchase (assuming you financed). If you are an all cash buyer it's a wash.
Posted by: lechacal at May 28, 2009 10:39 AM
Eh Dumbasses! Did you see my posts yesterday????? The Bond Market has gone Tango Uniform! Everyone is getting out of 10 & 30 year Treasuries and buying the short end! Plus insurance of MBS has blown out out!
Buh bye Retards! The Mutant Asset Bubble is collapsing!
The What
Someday this war is gonna end...
Posted by: Return of The What at May 28, 2009 10:46 AM
I take it back. I'm wrong. You recapture your losses on the next purchase if prices go back up. But because the bank gets paid back first you won't be able to roll over equity into down payment onto the next place if prices have declined. So the danger is not failure to recapture losses (eventually) but not having down payment if you want/need to move (ie being locked in underwater).
Posted by: lechacal at May 28, 2009 10:49 AM
l,
your revised analysis sounds right. If you are going to trade up, leverage works against you in a down market. Those who won't need to try to trade up because they bought all they want or need are more immune.
Posted by: slopefarm at May 28, 2009 11:15 AM
Mopar:
My insider source was right (see thread http://www.brownstoner.com/brownstoner/archives/2009/05/chase_turns_off.php): rates are going up quickly.
http://www.bankrate.com/finance/mortgages/mortgage-analysis.aspx
bmfesq:
The banks obviously don't want you to refinance. Their requirements have been much more stringent. I am also struggling with my refinancing. Hope it will go through though.
Posted by: lostintranslation at May 28, 2009 11:15 AM
will they go up? yes
when? yesterday
how much? almost a point over the past two days
Posted by: raphael9 at May 28, 2009 5:50 PM
Hey Mopar--I sent you an email yesterday about our situation. We're in contract at Halsey/Lewis (just got our confirmation letter from the bank today!!) and totally excited. Just on this thread, we've got 5.37 percent interest on an FHA loan. Send me an email when you get a chance.
Posted by: rabbit at May 28, 2009 9:30 PM
Rabbit:
Congrats on the commitment letter from the bank! You are almost there!
Posted by: lostintranslation at May 28, 2009 10:23 PM
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