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12-04-2008, 11:54 PM
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#1
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Recycles dryer sheets
Join Date: Jun 2007
Posts: 67
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Looks like the Government intends to drive mortgage rates down to 4.5 percent. I have mixed feelings. It should help soak up some of the surplus housing, but it seems to me that it is bad news for investors. Who wants to invest in mortgages generating 4.5 percent? And, if you are buying a house as an investment, it seems to me that buying when interest rates are at their nadir is not the smart thing to do. When rates inevitably go back up, the house you bought as an investment becomes less affordable to potential buyers. Chances are it will take a L-O-N-G time before you will be able to turn a profit. As a potential buyer with cash, I'd rather see interest rates head UP . . . that would drive the initial purchase price DOWN. Anyway, I wonder whether Paulson/Bernanke have thought through all the collateral effects this time.
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12-05-2008, 12:18 AM
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#2
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 3,078
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But the refinance market will be great. Most sane people refinanced 3 years ago when mortgage rates were 4.5%.
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12-05-2008, 05:00 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Jun 2006
Location: Dublin, Ohio
Posts: 2,448
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I believe it is for NEW home purchases. Trying to move the glut of new homes off the market.
__________________
Proud Vietnam Veteran: Cu Chi 66, 1 Bde, 25ID & Pleiku 66-67 41st Sig Bn 1st STRATCOM - Army Retired Jun 1979.
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12-05-2008, 05:09 AM
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#4
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Recycles dryer sheets
Join Date: Dec 2006
Posts: 204
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I also heard that the rate is for new home purchases; not refi's. Not sure how I feel about it. Maybe it would help move excess inventory, but will there be tougher requirements to assure that the borrower could actually repay the loan? All I've heard was just a short blurb on the radio - no details.
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12-05-2008, 06:53 AM
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#5
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Full time employment: Posting here.
Join Date: Oct 2002
Posts: 715
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 Quote:
Originally Posted by OAG
I believe it is for NEW home purchases. Trying to move the glut of new homes off the market.
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Now if I'm underwater on my house - I can turn it back to the bank and then get a new mortgage for the same house (or another) at 4.5%. They'll probably have a catchy name for it . . . maybe a "synthetic refi" . . . oh yeah the government issues the loan artificially low at 4% and the mortgage broker pockets .5% This is going to have a great outcome!
__________________
Random Reinforcement is Highly Addictive.
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12-05-2008, 07:04 AM
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#6
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Recycles dryer sheets
Join Date: Nov 2008
Location: Jacksonville
Posts: 107
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I thought I read (and I can't seem to find the story) that it is also for re-fi's with very good credit! 
Mike
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12-05-2008, 07:07 AM
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#7
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Recycles dryer sheets
Join Date: Sep 2002
Posts: 243
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I think you are correct for purchases only not refi. However if they opened it up to refis also people that could refi could potentially imporve their cashflow position to be able to spend more in the big C of the GDP calculation (GDP = C+I+G+Xn) if they chose to help jumpstart the economy.
I personally think it is a little short sided to limit it to new purchases only. OTOH if they opened it up to refis would the market forces let it drift to 4.5%? Not sure how the Govt would make sure this occurred. Seems to me people will jump in earlier and the "invisible hand" would settle a some point.
Tomcat98
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12-05-2008, 07:12 AM
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#8
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Recycles dryer sheets
Join Date: Nov 2008
Location: Jacksonville
Posts: 107
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12-05-2008, 01:04 PM
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#9
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Dryer sheet aficionado
Join Date: Jan 2008
Posts: 30
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Housing got us into this mess and it's going to get us out of it.
Why keep interest rates elevated and continue the downward spiral,if you can slow,or even stop the bleeding by reducing rates?
Many people will not be eligible for these rates,but you have to start somewhere......
It should boost the confidence levels of those who are able to pay their loans,but are upside down and just want to walk away,like sooooo many people are doing.
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12-05-2008, 01:51 PM
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#10
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Thinks s/he gets paid by the post
Join Date: May 2008
Location: State of Confusion
Posts: 1,732
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Looks like it's time to refinance my $0 mortage into $400K that I can bury in the backyard. 
__________________
"A yawn is more disconcerting than a contradiction"
Mason Cooley
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12-05-2008, 02:02 PM
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#11
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Aug 2006
Posts: 9,174
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And then effect your "squatter's rights" and refuse to pay or move...........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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12-05-2008, 07:12 PM
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#12
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Thinks s/he gets paid by the post
Join Date: Feb 2008
Location: Texarkana, TX
Posts: 1,263
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Quote:
Originally Posted by Tomcat98
I think you are correct for purchases only not refi. However if they opened it up to refis ......
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Now that's just silly Tomcat, - refi's? - how could refi's of existing homes ever serve the short term interests of the National Association of Homebuilders & National Association of Realtors lobbies? 
http://www.opensecrets.org/pacs/pacg...901&cycle=2008
http://www.opensecrets.org/pacs/pacg...718&cycle=2008
__________________
12/31/09 at age 49 - Still on Target!
unexpected correction to sig - Now retired 09/09 not quite yet 49!
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12-06-2008, 02:26 AM
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#13
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Thinks s/he gets paid by the post
Join Date: Aug 2004
Location: Laurel, MD
Posts: 1,239
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Navy Fed Credit Union is currently at 5% for 30 yrs and 4.5 for 15
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12-06-2008, 08:33 AM
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#14
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Recycles dryer sheets
Join Date: Sep 2002
Posts: 243
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Quote:
Originally Posted by Texarkandy
Now that's just silly Tomcat, - refi's? - how could refi's of existing homes ever serve the short term interests of the National Association of Homebuilders & National Association of Realtors lobbies?
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I guess you are right. Silly of me to even think about the benefit helping another group besides these lobbies.
Tomcat98
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12-07-2008, 01:32 PM
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#15
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Recycles dryer sheets
Join Date: Dec 2002
Posts: 59
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Just get it to 5% and I'm all over it !!!!!!!!!
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12-07-2008, 10:35 PM
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#16
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Thinks s/he gets paid by the post
Join Date: Feb 2008
Location: Texarkana, TX
Posts: 1,263
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DW was sharp enough to refi us into a 4.5% 15yr fixed back in 2003 & we have always made our payments timely - do you think Obama will have a plan to order our principle reduced to reflect current market values?
Maybe if I promise to go out & splurge on a couple of new cars we don't need to replace our 94 & 01 models?
__________________
12/31/09 at age 49 - Still on Target!
unexpected correction to sig - Now retired 09/09 not quite yet 49!
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12-08-2008, 08:55 AM
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#17
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Aug 2006
Posts: 9,174
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Quote:
Originally Posted by Texarkandy
Maybe if I promise to go out & splurge on a couple of new cars we don't need to replace our 94 & 01 models?
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DW is not amused, but I told her I would go buy a domestic car if Congress gives me a $4000-$5000 tax credit. Probably a GM car since I was a $2000 GM card rebate just sitting there.......... 
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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12-08-2008, 05:30 PM
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#18
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Thinks s/he gets paid by the post
Join Date: Jan 2006
Posts: 1,004
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I'm waiting... checking daily. Was 5.25% last Friday at my local CU.
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12-08-2008, 08:44 PM
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#19
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Recycles dryer sheets
Join Date: Jul 2008
Location: ENE MO - near STL
Posts: 424
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Navy Fed CU
15 yr fixed
4.25% 1.875 pts
4.625% no pts
30 yr fixed
4.75% 2.875 pts
5.125% no pts
The rates with discount pts yield the lowest APR. But if you're not staying very long in the house you might not want to pay the points. Since I plan to stay here forever and I can't imagine ever getting a significantly lower (if lower at all) rate to refi again, I'm going with the 4.25 15 yr fixed; lowered from my current 6% 30 yr (with 17 yrs remaining after some paid down principal). Sweet deal.
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12-08-2008, 08:53 PM
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#20
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Full time employment: Posting here.
Join Date: Aug 2006
Location: athens
Posts: 513
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Am currently trying to refi house. It turns out there's a new policy coming on December 19th that will affect high ratio loans. Those are loans taken out by people with little or no income (from wo*king.) That's mainly those of us retired and drawing from our assets. Assets count, but not as much as having a job!! Even if you can payoff the loan outright, you may not get the loan. Go figure. 
__________________
Can't you see yourself in the nursing home saying, " Darn! Wish I'd spent more time at the office instead of wasting time with family and friends."
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