4.5 Percent Morgages

G

Geoffrey

Recycles dryer sheets
Joined
Jun 3, 2007
Messages
118
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.
 
But the refinance market will be great. Most sane people refinanced 3 years ago when mortgage rates were 4.5%.
 
I believe it is for NEW home purchases. Trying to move the glut of new homes off the market.
 
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.
 
OAG said:
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!
 
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
 
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
 
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.
 
Looks like it's time to refinance my $0 mortage into $400K that I can bury in the backyard.;)
 
Westernskies said:
Looks like it's time to refinance my $0 mortage into $400K that I can bury in the backyard.;)
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And then effect your "squatter's rights" and refuse to pay or move...........;)
 
Navy Fed Credit Union is currently at 5% for 30 yrs and 4.5 for 15
 
Texarkandy said:
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? :D
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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
 
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?
 
Texarkandy said:
Maybe if I promise to go out & splurge on a couple of new cars we don't need to replace our 94 & 01 models?
Click to expand...

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..........:eek:
 
I'm waiting... checking daily. Was 5.25% last Friday at my local CU.
 
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.
 
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.:duh:
 
I just locked at Boeing CU.

30 yr fixed
4.75% .625 pts (1% origination fee + ~$1800 in fees)

The fees might actually come down to about ~$1500 (escrow fee may be lower than what they have stated).

Altogether, the numbers made sense for me. With the previous mortgage, I've been prepaying (ARM at 4.75%, adjusting in two years), but I'll hold onto this one for quite awhile and stick with minimum payments.
 
Gardnr said:
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.
Click to expand...

My primary residence mortgage is currently held by Chase. 30 year fixed @ 5.875%. I have about 14 years left to pay. I am also a member of NFCU, as well as USAA, and Pen Fed CU. I truly believe the interest rates are going to come down significantly more than they are now. I'm looking for something around 3-3.5% on a 15 year fixed SOON! :)

Mike
 
wrigley said:
My primary residence mortgage is currently held by Chase. 30 year fixed @ 5.875%. I have about 14 years left to pay. I am also a member of NFCU, as well as USAA, and Pen Fed CU. I truly believe the interest rates are going to come down significantly more than they are now. I'm looking for something around 3-3.5% on a 15 year fixed SOON! :)

Mike
Click to expand...

Kind of off-topic but I fully expect my HELOC with PENFED to drop to eiither 3.5 or 3.0% on 12/16/08 (currently 4.5%). It is interest only and the funds to pay it off, if so inclined or rate goes up quickly, are earning 6.25% at same CU.
 
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