4.5 Percent Morgages

[jug]

By pushing rates down, you keep home prices from falling. However, the falling home prices are coming down from ridiculous levels anyhow. I would rather see the free market work itself out, let rates stay where they are and let the home prices fall to a more realistic level.

Making money easy as before only encouraged an upward spiral of prices, much like a feeding frenzy into a ponzi scheme.

jug

 

[OAG]

do share where! Inquiring minds want to know.

See edit of my post.

 

[jIMOh]

When will the government learn low rates got us into this situation, maybe higher rates will get us out?

If one owes more than 100% of mortgage because of this, can they get those rates mentioned above? I have a 30 yr fixed at 5.75% with 28 years left... but the 280k price tag which is going to be refinanced is about 20k more than house will be appraised for.

 

[ziggy29]

When will the government learn low rates got us into this situation, maybe higher rates will get us out?

It's not just low rates that got us into it.

It was a combination of low rates, careless lending practices and reckless products like nothing-down, interest only ARMs.

If they stuck to more "conventional" funding of fixed-rate mortgages for decent credit risks, much of this wouldn't happen. Yes, home prices would have risen some because most people define what they can "afford" in terms of monthly payment rather than price... but it wouldn't have been nearly the toxic mess that occurred in the last several years.

 

[jIMOh]

It's not just low rates that got us into it.

It was a combination of low rates, careless lending practices and reckless products like nothing-down, interest only ARMs.

If they stuck to more "conventional" funding of fixed-rate mortgages for decent credit risks, much of this wouldn't happen. Yes, home prices would have risen some because most people define what they can "afford" in terms of monthly payment rather than price... but it wouldn't have been nearly the toxic mess that occurred in the last several years.

Yes, I agree.

My off topic point was that high rates

a) would make people want to borrow less
b) would probably give the banks more money to lend (people likely to invest in cash because it pays higher)
c) people already in trouble would have their situations get wrecked quickly (and fixed quickly)?

IMO keeping rates low for such a prolonged amount of time is delaying a further crash, not preventing a crash.

 

[cardude]

It's not just low rates that got us into it.

It was a combination of low rates, careless lending practices and reckless products like nothing-down, interest only ARMs.

The mortgages were just part of the problem-- the real problem was all the stooopid credit default swaps that were written on these mortgages without any reserves to pay the claims. That's what blew up the system. I think we could have handled the amount of foreclosures if that's all there was to it.

 

[JohnDoe]

I might do an app tonight. Penfed 15yr 5% 0 pts closing costs about $1100.

 

[JDARNELL]

I got a call today from the mortgage guy my wife uses for her clients. rate was 5.0 with 1 point for a 30 yr or 5.125 @ 0

Tomcat98

 

[Nords]

I got a call today from the mortgage guy my wife uses for her clients. rate was 5.0 with 1 point for a 30 yr or 5.125 @ 0

I'm seeing those rates at NFCU, but they also added on a "1% loan origination fee". By the time all the junk fees are added in we'd be at the equivalent of 5.375%-- what we have now.

Can you pick up one of your mortgage guy's loans for me too please?

 

[tulak]

Looks like rates went down more today. The BECU loan I locked at 4.75% (APR 5.0) is now available at 4.5% (APR 4.78) and other sites also show a drop (penfed finally went down).

The only difference regarding my loan at BECU is the point spread. I had .625 and now it's 1.0. But 1.0 might not be the actual points, since the day I locked, the quote showed .875 but for whatever reason I got .625. I didn't both to ask why there was a difference, just considered myself lucky.

And for those that prefer to pay less in closing costs/fees, you can get a 30 year fixed at 5.0% with -1.125 points to cover the origination fee. According to their quote, this results in about $1100 in fees, which is cheaper than anywhere else I've been able to find, except maybe NFCU, but I don't qualify for membership there.

Cheap money, you gotta love it.

Makes me wish I waited.

But if I did that, rates would have gone up.

Oh well.

 

[JohnDoe]

I taking the PenFed 15yr @ 4.5 .875 points today.

I've been waiting since Jan when I missed that 1 day of rate drops.