4.75% 30 year Mortgage

Blueone

Blueone

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Jan 24, 2007
13,822
Lake Erie, Ohio
Boat Info
2004 420 Sundancer
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Cummins 6CTA 450's
My wife and I are looking at an investment property...today the bank offered 4.75% to her...no points....but I was in meetings all day so I couldn't get back to her... she never closed... My wife was pissed because at the end of the day the rate went up to 5.0% when I finely got back to her.....I said don't worry about it...it will be back and lower....she disagreed....which was not good.

So I am wondering what you guys are thinking ??...What do you think mortgage rates will be in the New Year.....
 
Fixed mortgage rates are typically inline with the 10-year treasury note. Unfortunately, the government does not have direct control over what that rate is as the notes are auctioned off from time to time and so they go to the highest bidder. The higher someone pays for a 10-year note, the lower the interest rate. Because of the panic in the markets, everyone has been moving their cash and investments into treasuries and the shorter term notes have people paying the face value so the interest rates have been going to zero. It's basically saying "Here Uncle Sam, you can hold my money for 3 months and you don't have to pay me interest". Because of the longer term, the 10-year notes have not had the "going to zero" interest rate issue but it still was going down.

The interest rates on 10-year notes goes up when there is less demand (hence people demanding more interest or they won't buy them). When the stock market is doing well, people put cash in the stock market instead of t-bills so that effects the interest rate. A crappy stock market generally drives people to t-bills and lowers mortgage rates. People are now starting to put money back in the stock market so 10-year notes and fixed mortgage rates have been going back up.

The thing the government is doing to try and lower interest rates on 10-year notes is buying them back so they'll create an artificial demand for them. They are basically going to sell 30 year notes to China and buy 10 year notes from the open market.... go figure.... so they said they have a goal of getting fixed rates down in the 4.5% range....

Adjustable Rate Mortgages are tied to short term interest rate instruments such as Libor or the US Prime lending rate so the government has more control over some of those (not the Libor ones though). Those rates have gone into the toilet and Libor is around 0.5% now for 30 day paper.

This is where people will scream at me but if you have cash reserves to weather storms, ARMs are actually a better deal IMO as they are historically lower interest rates than fixed (if you average it out). However, getting into an ARM because that's all one can afford is not a good strategy...

So are fixed going up in the short term? Probably... depends on two factors though... If the stock market has some rally over the next few months (which some are expecting) then they'll go up but if the fed does the 10-year buy back program, they'll go down... So who really knows...

Boat loans, as an FYI, are not really tied to anything because the market to sell the loan to someone else is pretty limited. For a $1M boat loan, the interest rate is over 8% here and that is if you have perfect credit. That's not cheap money... that's expensive money...
 
We went through the same thing yesterday with our mortgage guy. They quoted 4.6 at around 8:30am & by 10am they quoted 4.3. Kim gave her mom (real estate agent) a call to see what she thought who in turn called her broker who pretty much said what Gary just said. We locked in at 4.3 Scott
 
Blueone and avguy, who are you talking to to get these rates on an investment property? How much are they asking you to put down?
 
mrsrobinson said:
Blueone and avguy, who are you talking to to get these rates on an investment property? How much are they asking you to put down?
Click to expand...

Sorry to mislead you........our's is a refinance on our home mortage. Scott
 
Mrsrobinson... My son is in his first year university in residence.... for what I am paying a month for that I would be better off buying a house....I told the bank I would put 20% down I never asked how little I could put down.. The bank is Chase bank
 
Please send me the info also on the refi of 4.3%. I am currently locked in at 5.75% so it would make a difference.
 
Got it, thanks

Just spoke with the broker who did our current home so I could get our numbers. He said rates are back at 5% today.
 
What kind of points are you paying for a 4.3 rate? I'm guessing 2 points. I locked day before yesterday at 4.75 no points. I was offered 4.25 with a 2 point buydown but I plan to sell and move before I would get my money back. That was with Wells Fargo. If you know your staying put, a 2 point buydown may not be a bad deal. SB
 
dcwjd said:
Please send me the info also on the refi of 4.3%. I am currently locked in at 5.75% so it would make a difference.
Click to expand...

Just sent you the info. Lol.....I made need to work up some type of commission deal with the Mortage co. Scott
 
mrsrobinson said:
Got it, thanks

Just spoke with the broker who did our current home so I could get our numbers. He said rates are back at 5% today.
Click to expand...

When Kim spoke with her mother yesterday her mother's broker said to lock the rate in NOW....like don't stop to use the bathroom or eat lunch NOW. So we did.
 
Newbie said:
What kind of points are you paying for a 4.3 rate? I'm guessing 2 points. I locked day before yesterday at 4.75 no points. I was offered 4.25 with a 2 point buydown but I plan to sell and move before I would get my money back. That was with Wells Fargo. If you know your staying put, a 2 point buydown may not be a bad deal. SB
Click to expand...

Had to pay a 1% origination fee. But really......4.3/ 4.5/ 4.75/ 5.0 + or - a couple of points....imo they are all pretty dam good rates given todays economy. Scott
 
I just got my leter from my mortgage company that my 5 year ARM is up and that my rate will go from 4.4% up to 4.5% (LIBOR rate +2). I have been holding out on locking in because I have had a great rate for the last 5 years, it seems to be working in my favor (for once). I called my mortgage company and asked what kind of rate I can get if I lock in and they said that I can probably get the same 4.5% locked for the remaining 25 years without any closing costs, they would just amend the terms. It sounded almost to good to be true but they said this plan was available only to there customers who were never late on a payment, and would rather keep us then have us go somewere else to get a refinance.

Now if I can get them to do something about the 250K I lost in home value....
 
On these 4.5% and 4.75% rates....what is the APR? To compare apples to apples, you have the compare the APR's from different banks.
 
"A lot of people can't take advantage of these great rates because they suddenly have little, or no equity in their homes."

Exactly what the broker we used for our current load just told us. I just spoke with a tennis bud who is an appraiser, same message.
 
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