4.5 Percent Morgages

Geoffrey · 12-04-2008, 10:54 PM

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.

LOL! · 12-04-2008, 11:18 PM

But the refinance market will be great. Most sane people refinanced 3 years ago when mortgage rates were 4.5%.

OAG · 12-05-2008, 04:00 AM

I believe it is for NEW home purchases. Trying to move the glut of new homes off the market.

bubba · 12-05-2008, 04:09 AM

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.

riskadverse · 12-05-2008, 05:53 AM

Quote:

Originally Posted by OAG

I believe it is for NEW home purchases. Trying to move the glut of new homes off the market.

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!

wrigley · 12-05-2008, 06:04 AM

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

Tomcat98 · 12-05-2008, 06:07 AM

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

wrigley · 12-05-2008, 06:12 AM

30-year mortgages at 4.5 percent? | TheNewsTribune.com | Tacoma, WA

liveitup · 12-05-2008, 12:04 PM

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.

Westernskies · 12-05-2008, 12:51 PM

Looks like it's time to refinance my $0 mortage into $400K that I can bury in the backyard.

FinanceDude · 12-05-2008, 01:02 PM

Quote:

Originally Posted by Westernskies

Looks like it's time to refinance my $0 mortage into $400K that I can bury in the backyard.

And then effect your "squatter's rights" and refuse to pay or move...........

Texarkandy · 12-05-2008, 06:12 PM

Quote:

Originally Posted by Tomcat98

I think you are correct for purchases only not refi. However if they opened it up to refis ......

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

jazz4cash · 12-06-2008, 01:26 AM

Navy Fed Credit Union is currently at 5% for 30 yrs and 4.5 for 15

Tomcat98 · 12-06-2008, 07:33 AM

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?

I guess you are right. Silly of me to even think about the benefit helping another group besides these lobbies.

Tomcat98

tjon72 · 12-07-2008, 12:32 PM

Just get it to 5% and I'm all over it !!!!!!!!!

Texarkandy · 12-07-2008, 09:35 PM

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?

FinanceDude · 12-08-2008, 07:55 AM

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?

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..........

Bimmerbill · 12-08-2008, 04:30 PM

I'm waiting... checking daily. Was 5.25% last Friday at my local CU.

Gardnr · 12-08-2008, 07:44 PM

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.

tightasadrum · 12-08-2008, 07:53 PM

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.

12-04-2008, 10:54 PM	#1
Geoffrey Recycles dryer sheets Join Date: Jun 2007 Posts: 61	4.5 Percent Morgages 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.

12-05-2008, 04:00 AM	#3
OAG Thinks s/he gets paid by the post Join Date: Jun 2006 Location: Dublin, Ohio Posts: 2,448	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.

12-05-2008, 12:51 PM	#10
Westernskies Thinks s/he gets paid by the post Join Date: May 2008 Location: Arizona Posts: 1,413	Looks like it's time to refinance my $0 mortage into $400K that I can bury in the backyard. __________________ There's nothing in the middle of the road but yellow stripes . . . and dead armadillos. ~Jim Hightower

12-07-2008, 09:35 PM	#16
Texarkandy Thinks s/he gets paid by the post Join Date: Feb 2008 Location: Texarkana, TX Posts: 1,262	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!*

12-08-2008, 07:53 PM	#20
tightasadrum Full time employment: Posting here. Join Date: Aug 2006 Location: athens Posts: 513	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."

12-04-2008, 11:18 PM	#2
LOL! Thinks s/he gets paid by the post Join Date: Jun 2005 Posts: 2,678	But the refinance market will be great. Most sane people refinanced 3 years ago when mortgage rates were 4.5%.

12-05-2008, 04:09 AM	#4
bubba Recycles dryer sheets Join Date: Dec 2006 Posts: 172	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.

12-05-2008, 06:04 AM	#6
wrigley Recycles dryer sheets Join Date: Nov 2008 Posts: 90	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

12-05-2008, 06:07 AM	#7
Tomcat98 Recycles dryer sheets Join Date: Sep 2002 Posts: 232	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

12-05-2008, 06:12 AM	#8
wrigley Recycles dryer sheets Join Date: Nov 2008 Posts: 90	30-year mortgages at 4.5 percent? \| TheNewsTribune.com \| Tacoma, WA

12-05-2008, 12:04 PM	#9
liveitup Dryer sheet aficionado Join Date: Jan 2008 Posts: 30	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.

12-06-2008, 01:26 AM	#13
jazz4cash Thinks s/he gets paid by the post Join Date: Aug 2004 Location: Laurel, MD Posts: 1,222	Navy Fed Credit Union is currently at 5% for 30 yrs and 4.5 for 15

12-07-2008, 12:32 PM	#15
tjon72 Recycles dryer sheets Join Date: Dec 2002 Posts: 56	Just get it to 5% and I'm all over it !!!!!!!!!

12-08-2008, 04:30 PM	#18
Bimmerbill Full time employment: Posting here. Join Date: Jan 2006 Posts: 853	I'm waiting... checking daily. Was 5.25% last Friday at my local CU.

12-08-2008, 07:44 PM	#19
Gardnr Recycles dryer sheets Join Date: Jul 2008 Location: ENE MO - near STL Posts: 424	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.

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)

Thread Tools	Search this Thread
Show Printable Version Email this Page	Search this Thread: Advanced Search
Display Modes
Linear Mode Switch to Hybrid Mode Switch to Threaded Mode

Similar Threads
Thread	Thread Starter	Forum	Replies	Last Post
What percent buyout offer?	hogtied	FIRE and Money	10	10-24-2007 12:10 PM
401k Percent Limit	doah001	FIRE and Money	13	01-14-2006 07:17 PM
Zero-Percent Certificate of Indebtedness ???	Craig	FIRE and Money	6	11-21-2005 04:43 PM
percent above inflation	searcher	FIRE and Money	15	01-10-2005 05:15 PM
Initial Withdrawal Percent?	moguls	FIRE and Money	7	12-20-2003 03:59 PM