Home loan opinion

chemical cookie · 12-08-2010, 19:10

Gents (and Ladies)

Looking to get you opinions on my next step. Found a house and wrote an offer on it. The offer was accepted and went to bank this afternoon to sign loan papers. Nothing is in concrete until we close on the house and things could change at a moments notice. We have secured a good deal on this property. I would absolutely love to get a solid rate on it as well. Credit score isn't a problem as I'm getting what the market is currently throwing at us (no inflated APR because of a low score). The current rate is 4.75%. With volatility running rampant through the world economy, the Congress undecided (for the most part) on what to do with taxes, Ireland just days away from massive cut backs and joining its neighbors in the EU, etc...do you see the market swinging lower to the absolute historic rates of just a few weeks ago at 4.25%? I have until the 20th or so to lock in. I would like nothing more than to have a house with a huge chunk of equity and a really low interest rate to boot. Any advice or thoughts?

Surgicalcric · 12-08-2010, 21:17

Grady:

I would jump on it brother, especially if it's the house we talked about.

See you in a few days...

Crip

Ret10Echo · 12-08-2010, 21:29

Just refi'd a 30-year at 4.375 (locked last month), Same lender is at 4.5 this week.

Seems like a decent rate all things considered, I'd lock it.

11Ber · 12-09-2010, 06:35

Wife and I locked in at 4.25/4.46 just two weeks ago. These low rates are nuts but obviously they are starting to fluctuate some. The Friday before we locked they were at 4.625 and then dropped to 4.25 in one business day.

1stindoor · 12-09-2010, 07:38

Lock now...anything under 5% is pretty good. The wife and I refinanced when the rates dropped last year and are now sitting at 4.75.

Mr Furious · 12-09-2010, 08:13

Agreed...lock. I refi'd two years ago from a 30-year at 5.78% to a 15-year at 4.5%. If you can swing doing a 15-year versus a 30 I would highly recommend it. The amount that goes to the principle from the start is an amazing difference and you will build equity faster.

chemical cookie · 12-09-2010, 08:56

Quote:

Originally Posted by Mr Furious

Agreed...lock. I refi'd two years ago from a 30-year at 5.78% to a 15-year at 4.5%. If you can swing doing a 15-year versus a 30 I would highly recommend it. The amount that goes to the principle from the start is an amazing difference and you will build equity faster.

I would love to be able to do a 15 year fix. Problem is I'd be paying 3k a month and I ain't no money man!

I appreciate the advice from everyone. Crip the house is a different one but has all of the bells and whistles. Probably the best deal I've found since I started looking in September. Of course the wife is in love with it. Go figure right!

craigepo · 12-09-2010, 09:22

I'm presuming that the rate you are about to receive is a fixed-rate, as opposed to a variable-rate?

An economics professor once told me about how great a fixed-rate loan was. If interest rates go up, you're safe. If they go down, you refinance.

chemical cookie · 12-09-2010, 10:57

Quote:

Originally Posted by craigepo

I'm presuming that the rate you are about to receive is a fixed-rate, as opposed to a variable-rate?

An economics professor once told me about how great a fixed-rate loan was. If interest rates go up, you're safe. If they go down, you refinance.

Yep it is a fixed rate. I probably would have reached over the table and slapped the loan officer if he even suggested a variable.

Seem far too many people get in trouble with variable rate loans. They are good at first but often times people choose those rates caus that is at the top of what they can afford. ..and when it goes up..

But thanks for the info.

The Lunchbox · 12-09-2010, 11:30

I just locked in as at 4.35 well for my home and used some of the seller concessions to buy the interest rate down another quarter point or so. You might consider that if you are going to come in under with the concessions. Low 4s is hard to argue with.

akv · 12-09-2010, 11:45

Happy wife=Happy life

chemical cookie · 12-09-2010, 11:58

Quote:

Originally Posted by akv

Happy wife=Happy life

Unhappy wife=HELL!

I learned this late in life. Much easier now that this is ingrained in my genetics. Thanks in part by a boot to the ass by unhappy wife.

ZonieDiver · 12-09-2010, 16:59

Quote:

Happy wife=Happy life

Quote:

Unhappy wife=HELL!

NO wife = GREAT life!

Jgood · 12-09-2010, 17:15

We just closed on our house at 4.25 missed 4% by a day. Wells Fargo was cheaper then any of the others.

Dozer523 · 12-09-2010, 17:42

Ask your lender to quote you your monthly payment at the day's rate and at the rate plus .5%. You'll see what a "missing the lock or drop" will cost you. You might be surprised at how small the difference is -- figure out how many hamburgers or beers you could buy with the difference and you'll have a gut feel for it. I'll bet you'll sleep better locked but if you don't (lock), you won't worry about it.
Want to see the big picture? Multiply the difference by 12 to see what your tax deduction will change by, multiply by 360 to see what your total cost difference will be. (that figure might get your atttention)
When we bought this house, I wanted to float (some lenders give you a break if you float to close) MRFL was a worrier. Rate dropped a tad, and I get to buy a nice bottle of wine or sixpack every month and "charged it" to her.
Don't pay points to "buy down" to a lower rate.
If you lock make sure your originator gives you a reciept. Some will not lock even when you tell them if they think rates will drop. Nothing wrong with that as long as they assume the risk. They give you the rate you "locked at par" and pocket what is now negative points. When I was doing mortgages I'd keep / split that with my manager). I watched the 30 Y Treasury and got (thought I was) pretty good at predicting what the rate would do tomorrow. I took the risk so I got the reward. If you float -- when it is time to prepare documents check rate and points with another lender to make sure you're getting what you paid for and that the originator isn't taking advantage of you in your "just thrilled to finally get it done"state.

You should not have to pay a lock fee. There is no cost to the lender to lock.

When all is right in the world, mortgage rates should be about 8%.

BTW really look over the Inspection report. If you can pick your own Inspector or have you lender recommend one, Do it. Agents really don't want you to find things wrong with the house, after the deal is accepted, they just want you to sign the deed. After the closing anything wrong is only your concern. You have 12 months to take legal action if there are problems that were not disclosed.