Interest rates advice

[dabuddha]

Well I'm finally getting around to purchasing a home and have been "haggling" with 2 lenders. Right now they've both come down to a 5% interest rate (30 year, fixed rate conventional loan). I have about 2 weeks before I have to lock in my rate.

I'd like to hear your opinion about where you think the interest rate could possibly go in the next week or two. My friend keeps telling me to hold off on locking it while my dad keeps telling me to lock it at 5% and call it a day.

TIA


p.s. I'll have pics of the house next week. Got a killer deal on it.

 

[Vette73]

Could go lower but probable not enough to make a hugh difference. Also make sure you know what fees and other cost they have are. The % is just one part of your loan.

 

[Descartes]

I just got quoted a 4.875% on a refi. It might go lower, but imo it's not going to go low enough to make a significant difference. I was hesitant when it was around 6, but < 5? Insane.

In short, I agree with your dad. Good luck!

 

[ponyo]

I would lock it in.

 

[dabuddha]

I got my Good Faith Estimates from both of them yesterday. Looks like the first lender is making his money from the discount point (1.675% to bring it to 5%) where the other one is making it from the origination fee (1%). I got the seller to agree to give 3% towards closing costs so none of this is coming out of my pocket so that's good at least.

I'm thinking of having him lock it and call it a day so I can cross one more thing off my list of things to worry about.

 

[Oyeve]

Originally posted by: Naustica
I would lock it in.

I feel the same. 5% is actually very good considering how fubared the economy is right now. Hell, 10-15 years ago 5% was not so bad. By todays standard thats pretty damn good for fixed rate.

 

[dabuddha]

Done deal, called him up and told him to lock it at 5%.

Thanks for the quick info guys Now I can worry about the other 1000 things

 

[dmcowen674]

Congrats on 5%

That's awesome

 

[ViviTheMage]

lock it up.

 

[TallBill]

Originally posted by: dabuddha
Done deal, called him up and told him to lock it at 5%.

Thanks for the quick info guys Now I can worry about the other 1000 things

Grats! Sounds like your going to be making some payments that you can afford.

 

[Aharami]

BoA's no fee is at 4.875%! thats crazy. I got 6.5% back in July. I just called them up to see if I can refi...but they said they only doing refi on 80% of the value now. Since I put down 10% at closing, I'd have to come up with another 10%. sucks

 

[dullard]

Yep. 5% is damn good historically. Heck, you'd be hard pressed to come anywhere near 5% just last week. You did well.

Now, don't be someone who looks back and regrets wise decisions. Yes, interest rates may go down, but they may also go up. What the fed does next week has very little impact on mortgage rates. Banks MAY pass on savings to you. Or, banks MAY just keep the profit themselves. It has more to do with the bank's individual situation and what investors want than what the fed does.

 

[TheInternet1980]

SAAAAAVVVVVEEEEDD BYYYYYY ZEEEEERROOOOOOOO

 

[dullard]

Originally posted by: Aharami
BoA's no fee is at 4.875%! thats crazy. I got 6.5% back in July. I just called them up to see if I can refi...but they said they only doing refi on 80% of the value now. Since I put down 10% at closing, I'd have to come up with another 10%. sucks

Were they giving no fees on refinances too? I didn't see that on their website. Even though I'm selling next summer, if I could get a no fee refinance at that rate, I'd save $600.

 

[Descartes]

Originally posted by: dullard

Originally posted by: Aharami
BoA's no fee is at 4.875%! thats crazy. I got 6.5% back in July. I just called them up to see if I can refi...but they said they only doing refi on 80% of the value now. Since I put down 10% at closing, I'd have to come up with another 10%. sucks

Were they giving no fees on refinances too? I didn't see that on their website. Even though I'm selling next summer, if I could get a no fee refinance at that rate, I'd save $600.

I'm in a very similar situation and would like to know the same. I was quoted $5300 on a refi at 4.875%. No fee would be great.

 

[T9D]

...

 

[OCGuy]

Im doing tons of paper in the 4s here in CA. I just locked someone in @ 4.875 and got .75% rebate from the lender as well.


It is a great time to refi if you qualify for a Fannie/Freddie loan.

 

[Aharami]

Originally posted by: Descartes

Originally posted by: dullard

Originally posted by: Aharami
BoA's no fee is at 4.875%! thats crazy. I got 6.5% back in July. I just called them up to see if I can refi...but they said they only doing refi on 80% of the value now. Since I put down 10% at closing, I'd have to come up with another 10%. sucks

Were they giving no fees on refinances too? I didn't see that on their website. Even though I'm selling next summer, if I could get a no fee refinance at that rate, I'd save $600.

I'm in a very similar situation and would like to know the same. I was quoted $5300 on a refi at 4.875%. No fee would be great.

hmm. not sure if their refi is no fee or not. i'll find out and update tonight

 

[OCGuy]

Originally posted by: dullard

Originally posted by: Aharami
BoA's no fee is at 4.875%! thats crazy. I got 6.5% back in July. I just called them up to see if I can refi...but they said they only doing refi on 80% of the value now. Since I put down 10% at closing, I'd have to come up with another 10%. sucks

Were they giving no fees on refinances too? I didn't see that on their website. Even though I'm selling next summer, if I could get a no fee refinance at that rate, I'd save $600.

There is no such thing as a "no fee" homeloan. They raise your rate higher than it technically has to be, and pay the costs with the rebate they recieve from selling you a higher rate.

 

[OCGuy]

Originally posted by: Aharami
BoA's no fee is at 4.875%! thats crazy. I got 6.5% back in July. I just called them up to see if I can refi...but they said they only doing refi on 80% of the value now. Since I put down 10% at closing, I'd have to come up with another 10%. sucks

That would be assuming your home has held the value since then. I am regularly seeing 10% drops over a 4 month span here still.

 

[Aharami]

Originally posted by: Ocguy31

Originally posted by: dullard

Originally posted by: Aharami
BoA's no fee is at 4.875%! thats crazy. I got 6.5% back in July. I just called them up to see if I can refi...but they said they only doing refi on 80% of the value now. Since I put down 10% at closing, I'd have to come up with another 10%. sucks

Were they giving no fees on refinances too? I didn't see that on their website. Even though I'm selling next summer, if I could get a no fee refinance at that rate, I'd save $600.

There is no such thing as a "no fee" homeloan. They raise your rate higher than it technically has to be, and pay the costs with the rebate they recieve from selling you a higher rate.

Actually BoA's no fee came out with smaller payments for us than Chase's with PMI and fees

 

[Aharami]

Originally posted by: Ocguy31

Originally posted by: Aharami
BoA's no fee is at 4.875%! thats crazy. I got 6.5% back in July. I just called them up to see if I can refi...but they said they only doing refi on 80% of the value now. Since I put down 10% at closing, I'd have to come up with another 10%. sucks

That would be assuming your home has held the value since then. I am regularly seeing 10% drops over a 4 month span here still.

so if my house has dropped in value...what does that mean?

 

[lightstar]

that's a great rate. congrats. i just refi'd @ 5.25 with ing direct. the rate is decent but my closing costs are less than 2K

 

[Bignate603]

Originally posted by: Aharami

Originally posted by: Ocguy31

Originally posted by: Aharami
BoA's no fee is at 4.875%! thats crazy. I got 6.5% back in July. I just called them up to see if I can refi...but they said they only doing refi on 80% of the value now. Since I put down 10% at closing, I'd have to come up with another 10%. sucks

That would be assuming your home has held the value since then. I am regularly seeing 10% drops over a 4 month span here still.

so if my house has dropped in value...what does that mean?

That means you may owe more than 90% of your home's value like you did when you bought the house. Let's say your house was $200k, you put down $20k so you owe 90% of your house value. Now lets say your house value drops 20% after you buy it. You owe $180k and your house is worth $180k. Rather than owing 90% of your house value you now owe 100% of your house value, meaning you have to cough up $36k more to be able to refinance at BoA rather than just another $20k.