My wife and I are getting ready to sell our townhouse in the next month or two(hopefully). We were planning on getting a single family house since the interest rates have been so low. We just had our first child recently and would like to have another baby in a larger home. Rates jumped this week from the low 4's to over 4 1/2 - 5 % and just priced us out of a bigger place. Anyone have any predictions on the rates in the next 6 months? Are the rates going to keep going upor will they dip back down? How do you know?...We would consider selling our TH and then rent an apartment month to month until the rates go back down if necessary.
Interest Rates
- Thread starter dbailey
- Start date
Huh? Rates go back down? Something even in the 5's is a historically low rate. I would jump on it before they got to 8%.
On a side note, I have about 20 files cleared for docs that are stuck because of the recent rate climb
On a side note, I have about 20 files cleared for docs that are stuck because of the recent rate climb
The Fed just made a huge purchase with QE2 yet rates went up, and Congress just broke another budget deficit record and the tax compromise bill extends unemployment benefits and reduces payroll tax. I think rates are headed higher.
PS lower the price on the offer to compensate for rise in rates...that's how bonds work.
PS lower the price on the offer to compensate for rise in rates...that's how bonds work.
Sounds like you might have been stretching it a little tight to begin with if a half a percentage point in interest rate increase prices you out of buying a place. Even on a 300K loan, a full percentage point is less than $200/month difference.
5% is still really good...
5% is still really good...
- Oct 30, 2000
- 42,589
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Rates were extra low due to the uncertainity of what the government was going to the economy.
Now that there "seems" to be an agreement which will start pumping $$ into the economy and not pull $$ from the public; the rate setters feel confident in uping the numbers. the ecoonomy is felt that it will not doubledip.
Now that there "seems" to be an agreement which will start pumping $$ into the economy and not pull $$ from the public; the rate setters feel confident in uping the numbers. the ecoonomy is felt that it will not doubledip.
We are paying way too much for the place we are in( about 3k/month in Fairfax VA).. our rate is like 6.5% and we didn't put much down. We will have to dip into savings to pay off the 20k or so we are upside down and wanted to get into a new place for the same or about the same monthly payment. So doing the math if we were able to get a loan at 4.25% we could get a much bigger place, but if the rates are 5% that knocks off about 75k off of the loan amount if we were to keep our payments the same. Thanks for the input though.. I'll keep my fingers crossed they don't go too high.
I'm not a financial analyst, but IMHO it is not the time to buy if your margin is so thin that you can't afford a 0.5~1% increase. Where will you turn to if interest rate jump to 6~7%?
alkemyst
No Lifer
- Feb 13, 2001
- 83,769
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A fixed rate loan doesn't change in rate. 1% is considered quite a bit on a mortgage.
To the main topic...rates have been at their lowest for a long time now...they are creeping up. There is no reason to think that they will not continue to do so back into at least the 6 and 7% range.
It's doubtful they will ever head south in the short term again.
Huh? Rates go back down? Something even in the 5's is a historically low rate. I would jump on it before they got to 8%.
On a side note, I have about 20 files cleared for docs that are stuck because of the recent rate climb
Yep person doing ours promised 3.75 but waited to long to lock so now we are waiting as well.
Yep person doing ours promised 3.75 but waited to long to lock so now we are waiting as well.
Yep I have a $1.6M loan on my desk that the loan officer could have locked at 4.875 3 weeks ago, and now the par rate is 5.625 and we are stuck.
F*cked up my volume bonus for December.
I understand fixed term rate, but what you are going to do when the contract is up in 3~5 years?
IMHO, the best offence strategy is a good defense.
The bank promised me that they will hold the rate at 3.65% 5 years fixed term for me for 90 days and that was 3 weeks ago ($350K construction loan). However, I'm intended to keep my money in the stock market till everything is kosher before I built (was going to break ground this coming up Feb.)Yep I have a $1.6M loan on my desk that the loan officer could have locked at 4.875 3 weeks ago, and now the par rate is 5.625 and we are stuck.
F*cked up my volume bonus for December.
- Oct 30, 2000
- 42,589
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Fixed rate is for the life of the loan.10,15,20,30 years.
A variable rate will expire in 3-5 years
A variable rate will expire in 3-5 years
IndyColtsFan
Lifer
- Sep 22, 2007
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You're not understanding what we're saying. A fixed-term loan locks the interest rate forever. So, if you get a 30-year loan at 5% tomorrow, your rate will still be 5% in the year 2038.
Mortgages that are "fixed" for 3 or 5 years and then the rate changes to the market rate are NOT fixed rate loans.
EDIT: Common Courtesy answered this above as well.
IndyColtsFan
Lifer
- Sep 22, 2007
- 33,655
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- 126
That isn't a fixed rate loan. I know some here might disagree with me, but NEVER get a variable rate loan. The only time I'd remotely consider a variable rate loan with a 5-year fixed rate is if I knew I'd sell the house in under 5 years and the locked rate was absurdly low.
I haven't seen 15~30 years fixed term as yet, but things could be different in the US.
Fixed Rate Mortgages -- Coast Capital Saving.
It was for 5-Year Rewriteable at 3.65%.
3-Years convertible was high than 3.65% when I applied for my the loan.
- Oct 30, 2000
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All my numbers were based on US rates/loan proceedings.
The Adjustible Rates (ARMS) are down about 1-> 1.5% lower than the fixed rates. Initially; when they rise during inflation, watch out
WellsFargo Rates
It was the ARMS that tripped the housign crisis initially when they would rise 2-3% and the original buyer could not cover the increase. As housing prices dropped, the buyer was unable to sell the house because of being upside down.
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Thanks, I don't think we have fixed rate terms that is longer than 5 years here in Canada. But, I will look into it.
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ARMs get all of the attention, but that wasn't the real problem. Fannie and Freddie will still buy ARMs to this day.
The problem was allowing anyone with a 580 FICO to do a 100% LTV loan without verifying income.
Now when I underwrite a ARM with a 5 year or less fixed period, the borrower has to qualify at the note rate + 2%.
Canadian laws doesn't allow greater than 5 year term loans.
And here is the why government intervention of the market forcing lenders to offer 30 year loans doesn't work.
Should We End the 30-Year Fixed-Rate Mortgage?
And here is the why government intervention of the market forcing lenders to offer 30 year loans doesn't work.
Should We End the 30-Year Fixed-Rate Mortgage?
rcpratt
Lifer
- Jul 2, 2009
- 10,433
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Unless a half percentage point is the difference between being a half percentage point away from where you can afford it. :hmm:
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