Refinanced today

[ScoobMaster]

Rossman -

We are just outside of Binghamton (the biggest city close-by that you will see on a map)

It takes about 4 hours or so to drive to NYC from here. Albany is about 2 hour drive.

Since I was looking at the weather radar anyway, Here is a link with a NY state map with Binghamton right in the center! Endicott is just to the west (about 1/8 of an inch on that map) along Route 17.

 

[Vic]

As a mortgage loan officer, I'm happy to tell everyone that rates are the absolute best they have ever been right now.

mithrandir2001, that's a very good rate on a 7/1 ARM. BTW, very, very, very nice to see someone outside the industry who understands that mortgage rates move according to the Bond market (particularly the 10 year, which took a sh!t today) and not the Prime Rate.

RossMAN, your friend is getting a good deal on that 3/1 ARM. C'mon, man, now's the best time to buy a house, these rates may never come back. PM me if interested, we'll get an approval and get you out there shopping, I work for one of the largest local independent lenders in town. We can even swap Heat after the deal

edit: wje, just read about your potential deal. I say take it if you can swing the payment. But recognize that VA loans are different than FNMA/FHLMC conventionals. Streamlines in particular are great loans. The lender can pick up the closing costs (and then some!) because yield-spread-premium pricing on VA's is so much better than conventionals. This is that money they will get "when they sell it to Chase." Where conventionals may only pay 0.5 to 1.0% of the loan "on the back" (which is what they get in return for selling you a slightly higher rate), VA loans pay 3 to 4% or more. Your lender is not being generous, they're making money, let me assure you. I won't go into all the details, but veterans get much better mortgages than the rest of us, and well they should. Rates are similar, but costs are always much less, incentives to the lender to do the loan are greater, they have to put less down (usually nothing) at purchase, and they don't pay PMI.

 

[AmigaMan]

do you guys think it'd be wise to switch from my 30-year 7.00% rate to a different mortgage. Say maybe a 7 year ARM or something else?
I've been living in the house for a whole year now and bought it at $119,900. Payments (with PMI, taxes, and insurance) are $1,026 a month. Last year it was $951 but they raised our county taxes this year

 

[Vic]

Originally posted by: AmigaMan
do you guys think it'd be wise to switch from my 30-year 7.00% rate to a different mortgage. Say maybe a 7 year ARM or something else?
I've been living in the house for a whole year now and bought it at $119,900. Payments (with PMI, taxes, and insurance) are $1,026 a month. Last year it was $951 but they raised our county taxes this year

No.
- 7% on a 30 year fixed is a good rate. A little high for the current market, perhaps in some people's opinion, but it is historically very good and not even the best rate you could get today would make up for the cost of refinancing.
- If your recent payment hike was from property taxes, no lender can change that or make that better for you.
- Never give up a fixed rate for an ARM. Never.

 

[AmigaMan]

Originally posted by: PSYWVic

Originally posted by: AmigaMan
do you guys think it'd be wise to switch from my 30-year 7.00% rate to a different mortgage. Say maybe a 7 year ARM or something else?
I've been living in the house for a whole year now and bought it at $119,900. Payments (with PMI, taxes, and insurance) are $1,026 a month. Last year it was $951 but they raised our county taxes this year

No.
- 7% on a 30 year fixed is a good rate. A little high for the current market, perhaps in some people's opinion, but it is historically very good and not even the best rate you could get today would make up for the cost of refinancing.
- If your recent payment hike was from property taxes, no lender can change that or make that better for you.
- Never give up a fixed rate for an ARM. Never.

Not even if we're only planning on staying in this house for 5 years or so?

 

[RossMAN]

ScoobMaster - Not a chance, I love the west side too much.

PSYWVic - I won't be buying a home until I payoff my car and all my outstanding cc debt which is going to take me at least 5 years then I'll get a home loan.

As a bank employee I get some pretty awesome fixed rates, no PMI and zero closing costs - no one can beat that, no one.

 

[AmigaMan]

Originally posted by: RossMAN
ScoobMaster - Not a chance, I love the west side too much.

PSYWVic - I won't be buying a home until I payoff my car and all my outstanding cc debt which is going to take me at least 5 years then I'll get a home loan.

As a bank employee I get some pretty awesome fixed rates, no PMI and zero closing costs - no one can beat that, no one.

Hey no fair, I'm a bank employee too but I have to pay PMI. My bank took a couple fees away, but I still had some closing costs to pay...I need to jump ship it sounds like...

 

[RossMAN]

Originally posted by: AmigaMan

Originally posted by: RossMAN
ScoobMaster - Not a chance, I love the west side too much.

PSYWVic - I won't be buying a home until I payoff my car and all my outstanding cc debt which is going to take me at least 5 years then I'll get a home loan.

As a bank employee I get some pretty awesome fixed rates, no PMI and zero closing costs - no one can beat that, no one.

Hey no fair, I'm a bank employee too but I have to pay PMI. My bank took a couple fees away, but I still had some closing costs to pay...I need to jump ship it sounds like...

It's one of the few good perks we bank employees have, after I get approved for a home loan and get the bank to pay for a Master's degree then I'm quitting and going to work in the IT field.

 

[Vic]

AmigaMan, I don't recommend it, but you can look into it.

RossMAN, nope, no one can beat that, unless it's a VA
Let me guess, BofA, right? I've heard about their great employee deals...

 

[RossMAN]

Originally posted by: PSYWVic
RossMAN, nope, no one can beat that, unless it's a VA
Let me guess, BofA, right? I've heard about their great employee deals...

It's a Fortune 500 company.

I'd love it if I had joined the Armed Forces at 18, put in 20 years, get out when you're 38 with a proud career serving our country, a very nice pension plan plus you have the skills and you can get another job in the civilian sector. Not to mention the VA housing deals that are available.

 

[mithrandir2001]

Originally posted by: PSYWVic

- Never give up a fixed rate for an ARM. Never.

<Sweat pouring down face>

I do know people can get royally screwed by an ARM, but you have to know what you are doing. I already know that before Year 8 comes around I will either have to close the loan by selling the house or refinance the balance again. The variable rate during years 8-30 is Prime + 2.75%. As recent as mid-2000 the prime rate stood at 9.50%, so my rate would be an insane 12.25%.

But this is my analysis (and it may apply to others). I just bought my first house and it is a starter home. It's a 2 bedroom, 1.5 bath townhouse without a garage or basement and it sits on 0.05 acres of land. (It cost $132,000 BTW, but I live in suburbs of a high-cost metro area). I'm 29 now and single but I can already imagine that by the time I turn 36, I'll want to be outta this house. Do I know that for sure? No, so I am taking a little bit of a risk. I'm financing about $105K so 6.50% vs 5.75% over 30 years means a difference of $51/month. If I took the 30 year fixed, I would be paying $51 a month extra in exchange for the safety of a fixed rate (over 30 years instead of 7). But if I decide to move within the next 7 years - or shortly thereafter - I'm paying for something I don't need. The prospect of saving $600 a year for up to 7 years straight was too appealing to turn down, so I picked the 7/1 ARM. I would never, ever go with an ARM with a very short fixed portion. Some are as short as 3 months. But products like the 7/1 or the 5/1 do have their place.

What's with all the 15 year fixed mortgages here? Homes are rather expensive in my area to finance with a 15 year loan, especially for first-time buyers. I personally could handle a 15 year loan (debt ratios would be 15%/21%), but I am VERY anal about cash flow and I want a slender monthly payment so that I can weather almost any storm. With interest rates as low as they are, I'd rather stretch the payments out and put the money I would have spent on a higher monthly payment into a taxable, liquid account. Mortgage interest is deductible so there's less urgency to pay down the mortgage. However, if you are the type of person who spends money simply because they have it in the bank, perhaps paying down the mortgage is a better option.

 

[BeerGod]

how much does it usually cost me up front to refinance my home? About $1000?

 

[charrison]

Originally posted by: BeerGod
how much does it usually cost me up front to refinance my home? About $1000?

Call your mortgage company and tell them to adjust your rates or you will move your loan elsewhere. If you are in good standing, they will probably drop the rate without too much cash involved.

 

[N8Magic]

You guys are scaring me here...

I just bought my first house, and I got a 25 year mortgage with a 5-year term at a 3.80% variable rate. If the rate starts to get out of hand, I can lock in at the current rate for the rest of the term.

ie. Right now rates are low, but if in 2 years they had jumped 2%, I could lock in at the 3-year fixed rate with no penalty.

Whats so bad about that?

 

[charrison]

Originally posted by: N8Magic
You guys are scaring me here...

I just bought my first house, and I got a 25 year mortgage with a 5-year term at a 3.80% variable rate. If the rate starts to get out of hand, I can lock in at the current rate for the rest of the term.

ie. Right now rates are low, but if in 2 years they had jumped 2%, I could lock in at the 3-year fixed rate with no penalty.

Whats so bad about that?

That sounds like a heck of deal.

 

[Squisher]

Saw a quote for 4.75%(no points) for a 15 yr. fixed in the Sunday paper(The Prefect Mortgage Company). I forgot to call today, but I have a feeling there closing costs are going to be through the roof.

 

[T2T III]

You guys are scaring me here...

Your option to lock sounds like a very good option. Take advantage of the lower rates at the moment with your variable rate loan and then lock in if the rates start to head up. Currently, the average for 30-year mortgages is approximately 6.50% - but depends on the market you are in.

Regarding the post about the 4.75% fixed rate for 15 years - the mortgage company can't charge you excessive closing costs. Nonetheless, the deals out there are pretty interesting.

I currently have a 30-year VA mortgage fixed at 6.5% on my house. I've been contemplating refinancing with a 15-year VA mortgage with a rate of 6% (as of a few weeks back). The only expenses that I would be responsible for would be the $650 "VA funding fee" and establishing new escrow funds for the mortgage. However, the mortgage company would absorb the other closing costs which would amount to approximately $1,500. The mortgage application company would then sell my mortgage to Chase and they would get "reimbursed" from Chase for the $1,500 that they provided. Chase, on the other hand, will make the $1,500 back pretty quickly off of me since they would hold my mortgage and receive all of my payments.

It seems like each time I look at mortgages, there are new programs being added on a frequent basis (e.g. - the mortgage application company paying $1,500 of my closing costs) - the only way one would have seen something like this in the past is if the builder of a new home or the seller of a used home was offering to cover mortgage financing expenses. However, mortgage application companies offering "incentives" is a new twist for me.

 

[Pliablemoose]

I refinanced for a conventional 15 year @ 5.875%.

According to "The Millionaire Next Door", you should pay off your house & never move again...

 

[KK]

Well I refinance two fridays ago. 6% 30 year conventional loan. I had 7.375 30 year VA loan. I did have to pay some discount points to get the 6. But what sucks is that with this PMI i now have to pay I save about 40 now, but once I drop the PMI I'll be paying 110 less. I think I got a decent rate but the closing fee were alittle excessive.

KK

 

[T2T III]

Well I refinance two fridays ago. 6% 30 year conventional loan. I had 7.375 30 year VA loan. I did have to pay some discount points to get the 6. But what sucks is that with this PMI i now have to pay I save about 40 now, but once I drop the PMI I'll be paying 110 less. I think I got a decent rate but the closing fee were alittle excessive.

Yeah, I hear you with that PMI crap. Fortunately, I now have about 50% equity in my home, so if I switched over from VA to conventional, I could avoid the PMI payments.

According to "The Millionaire Next Door", you should pay off your house & never move again...

Yes, you are correct. However, where I live (Northern Virginia), most people are buying big homes with big mortgages ($500,000 to $900,000 homes) and they think they're "rich". In actuality, they are poor and better hope that they never lose their high-salary jobs or they'll be slumming it like the rest of us. Actually, in the book "The Millionaire Next Door", the average home price based on the millionaires surveyed was somewhere in the $230,000 or $250,000 range - that is what their house was worth at the moment and not necessarily what they paid. Even Warren Buffet still lives in his home that he originally purchased somewhere in the range of 30 years ago.

 

[Mister T]

FYI -

the 10-year yield is at a 40 year low - it closed today at 4.08%.....

Lock tomorrow !!!!!!!!!!!!

 

[Vic]

Great article here.

In a nutshell, the Fed move yesterday to leave the Funds rate alone was the right one for the housing market, which is the economy's real white knight at this point. At this point, I think we may see excellent mortgage rates, at today's levels or maybe even slightly better, for the rest of the year.
With rates this low, don't be afraid to lock. No one knows how long this could last.
Reminder about locks: they are for better or worse and you must close inside the lock period (usually 30 days). Lock policies vary slightly for lender to lender, but basically if rates go up, all is well, you are locked. If rates go down, tough lock, you're locked. If you go past your lock period, try to get an extension before the lock expires (usually 10 more days and it usually costs 0.125%). Without an extension, the policy is generally "worst-case-scenario" for 30 days after the lock expiration. This means you either get the current market pricing or the day-of-lock pricing, whichever is worse, no exceptions.
The secret to getting a good mortgage loan? (And yes I'm biased) Shop before you apply, pick a lender, program, and loan officer that you like and feel comfortable with, stick with them and help your lender to get your loan closed on schedule.

 

[Pliablemoose]

Of course, if the economy really tanks, and the housing market goes belly up, we're all screwed...

 

[BeerGod]

ttt

 

[RossMAN]

Originally posted by: Mister T
FYI -

the 10-year yield is at a 40 year low - it closed today at 4.08%.....

Lock tomorrow !!!!!!!!!!!!

Damn, makes me wish I could afford a house right now.