should we lock in a rate?
We just closed on a house in November days before mortgage rates dropped. Now they are even lower. Should we lock in at 4.5 percent and refinance? or wait and see if they go lower? I know it’s all speculation but am curious if anyone understands the movement of rates better than I do and…
We just closed on a house in November days before mortgage rates dropped. Now they are even lower. Should we lock in at 4.5 percent and refinance? or wait and see if they go lower? I know it’s all speculation but am curious if anyone understands the movement of rates better than I do and has reason to think we should wait a little longer. Thanks.
Thanks for sharing your read of the government plans to buy mortgage backed securities and the market reaction to the news. I have been reading about this and think we’ll wait a little longer.
We have a Community Works mortgage through HSBC for our 3 family house which we pursued entirely because of the subsidized rate. It is usually around .5% lower than a standard 30 year fixed rate– it’s a good deal. I recommend any first time buyers look into the program.
Correct but will the lower rates have an effect on Jumbo loans? I don’t think lower rates will take action on jumbo loans because banks see jumbo loans as overpriced loans. Banks are not willing to throw anymore “air” into the housing bubble.
mopar- How many brokers have you talken to? It seems that every other week you are working with a different broker/lender.
203k loans are a lot of work and a lot of lenders that do them charge more for them due to the followup over the construction process.
Rates are currently higher for a multitude of reasons (see my post from a few days ago)
I wouldn’t lock anything until after the New Year, any quote right now is going to be garbage.
I was chatting with a mortgage broker Tuesday about rates. He was quoting me 6.5 with or without a 203K construction loan and with anywhere from 3 percent to 20 percent down. Credit score is excellent. Is this outrageous? Am I being taken to the cleaners?
I have a feeling mortgage rates could hit 4% within the next year.
The challenge will be to try and time the housing market to buy at the lowest price and get the lowest rate.
I’m not saying I have a crystal ball or anything. It’s just a guess.
Se- We will see lower rates after the new year for multiple reasons, 2 of which I’ll post below.
-Very little activity right now due to the holidays. A lot of traders are not working and volume is lower.
-The Fed had made it clear that they are going to buy mortgages backed securities with the intention of pushing rates lower. The rate drop that we say already was a reaction to that news. At this time the Fed hasn’t even bought any MBS. That drop in rate was just a reaction to the news. Imagine what rates will do when they actually start buying MBS.
As to the HSBC Community works program. That rate is artificially lower than the current rates available because it’s a subsidized program and it has caveats. If you can qualify that’s great and go ahead with it. Not everyone will be able to qualify for that program and it’s not indicative of the actual rates available to the majority of borrowers.
-Only a 3% down payment requirement for 1- and 2-unit properties, including Co-Ops
-Homebuyer education by an HSBC-approved counseling provider is required
-Borrowers income must be at or below 80% of the median area income or the property must be located in a designated census tract
-No payment reserve requirement
-Only 1% or $500 (whichever is greater) must come from your own savings.
-You can obtain an unsecured loan from HSBC to be used toward down payment.
-Certain income level restrictions apply depending upon property location
Thanks for the comments.
Adam, is there a quick answer as to why you think rates will go down more after the new year?
Honeycut, you are right; HSBC Community Works is the loan we are working with.
the Community Works Loans are 4.5% through HSBC.