Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
4.5 Percent Morgages
Old 12-04-2008, 11:54 PM   #1
Recycles dryer sheets
 
Join Date: Jun 2007
Posts: 118
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.
__________________

__________________
Geoffrey is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 12-05-2008, 12:18 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,616
But the refinance market will be great. Most sane people refinanced 3 years ago when mortgage rates were 4.5%.
__________________

__________________
LOL! is offline   Reply With Quote
Old 12-05-2008, 05:00 AM   #3
Thinks s/he gets paid by the post
OAG's Avatar
 
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,598
I believe it is for NEW home purchases. Trying to move the glut of new homes off the market.
__________________
Vietnam Veteran, CW4 USA, Retired 1979
OAG is offline   Reply With Quote
Old 12-05-2008, 05:09 AM   #4
Recycles dryer sheets
 
Join Date: Dec 2006
Posts: 291
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.
__________________
bubba is offline   Reply With Quote
Old 12-05-2008, 06:53 AM   #5
Full time employment: Posting here.
 
Join Date: Oct 2002
Posts: 717
Quote:
Originally Posted by OAG View Post
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!
__________________
Random Reinforcement is Highly Addictive.
riskadverse is offline   Reply With Quote
Old 12-05-2008, 07:04 AM   #6
Recycles dryer sheets
wrigley's Avatar
 
Join Date: Nov 2008
Location: Jacksonville
Posts: 345
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
__________________
wrigley is offline   Reply With Quote
Old 12-05-2008, 07:07 AM   #7
Full time employment: Posting here.
 
Join Date: Sep 2002
Posts: 538
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
__________________
JDARNELL is offline   Reply With Quote
Old 12-05-2008, 07:12 AM   #8
Recycles dryer sheets
wrigley's Avatar
 
Join Date: Nov 2008
Location: Jacksonville
Posts: 345
30-year mortgages at 4.5 percent? | TheNewsTribune.com | Tacoma, WA
__________________
wrigley is offline   Reply With Quote
Old 12-05-2008, 01:04 PM   #9
Dryer sheet aficionado
 
Join Date: Jan 2008
Posts: 36
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.
__________________
liveitup is offline   Reply With Quote
Old 12-05-2008, 01:51 PM   #10
gone traveling
 
Join Date: May 2008
Posts: 3,864
Looks like it's time to refinance my $0 mortage into $400K that I can bury in the backyard.
__________________
Westernskies is offline   Reply With Quote
Old 12-05-2008, 02:02 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Quote:
Originally Posted by Westernskies View Post
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...........
__________________
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.........:)
FinanceDude is offline   Reply With Quote
Old 12-05-2008, 07:12 PM   #12
Thinks s/he gets paid by the post
Texarkandy's Avatar
 
Join Date: Feb 2008
Posts: 1,281
Quote:
Originally Posted by Tomcat98 View Post
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
__________________
Retired 2009!
Texarkandy is offline   Reply With Quote
Old 12-06-2008, 02:26 AM   #13
Thinks s/he gets paid by the post
 
Join Date: Aug 2004
Location: Laurel, MD
Posts: 2,947
Navy Fed Credit Union is currently at 5% for 30 yrs and 4.5 for 15
__________________
jazz4cash is offline   Reply With Quote
Old 12-06-2008, 08:33 AM   #14
Full time employment: Posting here.
 
Join Date: Sep 2002
Posts: 538
Quote:
Originally Posted by Texarkandy View Post
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
__________________
JDARNELL is offline   Reply With Quote
Old 12-07-2008, 01:32 PM   #15
Recycles dryer sheets
 
Join Date: Dec 2002
Posts: 78
Just get it to 5% and I'm all over it !!!!!!!!!
__________________
tjon72 is offline   Reply With Quote
Old 12-07-2008, 10:35 PM   #16
Thinks s/he gets paid by the post
Texarkandy's Avatar
 
Join Date: Feb 2008
Posts: 1,281
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?
__________________
Retired 2009!
Texarkandy is offline   Reply With Quote
Old 12-08-2008, 08:55 AM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Quote:
Originally Posted by Texarkandy View Post
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..........
__________________
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.........:)
FinanceDude is offline   Reply With Quote
Old 12-08-2008, 05:30 PM   #18
Thinks s/he gets paid by the post
Bimmerbill's Avatar
 
Join Date: Jan 2006
Posts: 1,631
I'm waiting... checking daily. Was 5.25% last Friday at my local CU.
__________________
Bimmerbill is offline   Reply With Quote
Old 12-08-2008, 08:44 PM   #19
Recycles dryer sheets
Gardnr's Avatar
 
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.
__________________
Gardnr is offline   Reply With Quote
Old 12-08-2008, 08:53 PM   #20
Full time employment: Posting here.
tightasadrum's Avatar
 
Join Date: Aug 2006
Location: athens
Posts: 802
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."
tightasadrum is offline   Reply With Quote
Reply


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

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
What percent buyout offer? hogtied FIRE and Money 10 10-24-2007 01:10 PM
401k Percent Limit doah001 FIRE and Money 13 01-14-2006 08:17 PM
Zero-Percent Certificate of Indebtedness ??? Craig FIRE and Money 6 11-21-2005 05:43 PM
percent above inflation searcher FIRE and Money 15 01-10-2005 06:15 PM
Initial Withdrawal Percent? moguls FIRE and Money 7 12-20-2003 04:59 PM

 

 
All times are GMT -6. The time now is 09:44 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.