Off topic I know, I trust you all. Realestate question.

baseballjeff · May 14, 2009 5:58AM

First time home buying interest rates are at: 4.625% to 4.75%

Lock in? Wait? Is this good? Thoughts on it going down more? Or even going back up?

Thanks everyone!
Jeff

cwazzy · May 14, 2009 6:04AM

Lock in now. Rates can't get much lower.

Chris

Edited to add: JMHO

MBMiller25 · May 14, 2009 6:07AM

Jeff, I am building a house right now, and am not a first time home buyer, but I dont see rates jumping anytime soon. I think they will bounce between the 4.625 and 4.850 range for the balance of this year. I would ask your lender to check daily onthe rates for you and have you in the position to LOCK when rates hit that 4.50% again. They hit that rate earlier in the year and I feel like they will again. I am 6-7 months out from my house being completed and I am not worried about the rates increasing. Any of the rates mentioned is an incredible rate. So to summarize, I would WAIT but make a call to your lender and ask her to lock you in when they hit 4.50% again. I dont think you will see them go lower than that, although I have read talk about rates getting into the 3.75-4.00% range. That was before the house market posted 2 months of positive gains though. Not sure how that will affect things.

BunchOBull · May 14, 2009 6:07AM

Lock in now. There is a reason you can't get a fixed home improvement loan right now.

DES1984 · May 14, 2009 6:07AM

I agree. I would lock now as those rates are VERY low. I don't see it going much lower and working for a mtg company currently, we are seeing an influx of loans currently which usually means a interest increase very quickly.

Dboneesq · May 14, 2009 6:13AM

PM SENT.

gemint · May 14, 2009 6:15AM

I agree that it's best to lock in now (my opinion). I foresee rates going much higher in the future (not within a year though) as inflation starts to take hold with all the money the fed is printing. The high debt will need to be serviced and the only way the Fed will get investors interested in buying more of our bonds is if they raise interest rates. I don't know if it will be 1981 all over again but I wouldn't be surprised to see rates hit 10% in 3-5 years.

Caveat - I'm not an economist, this is just my gut feel.

lsutigers1973 · May 14, 2009 6:18AM

<< <i>There is a reason you can't get a fixed home improvement loan right now. >>

Not true. Just got done helping my mom and dad with one.

Jeff,

I am a Realtor and there are a few of us on this forum. Locking in a rate is dumb. Do not get locked into a rate until you have found the house you want and have a contract on it. The rates will not increase and there is still room for them to drop. At 4.5% with a Fed rate of 0, the lender is collecting the entire 4.5%.

As far as being a first time home buyer, you have about 7 more months for the first time home buyers tax credit. Basically $8000 of what you are borrowing is given right back to you when you file your taxes next year. Never been a better incentive for 1st timers and I doubt we will ever see anything like that again.

otwcards · May 14, 2009 8:29AM

Just to add to Bill's comment, rates will vary a little over the coming months, but it should be expected that they'll remain in the 4.5-5.0% range. Locking in is just a way for the bank to get a little extra money out of you unless they allow you to take a lower rate if they drop from the date of lock-in to the closing date. I have several clients that are 30-90 days away from closing and have rates of 4.675% and 4.75% respectively. I advised both not to lock in (the banks both were adding another .25% to lock in for 60-90 days.

Also, the $8000 first time home buyer is also available for previous home owners that have sold a home and have not owned a home for at least two years. A little loophole that most Realtors are not aware of and most lenders will never make mention of.

Sportsamerica · May 14, 2009 8:36AM

Historically, though if you are looking to settle in the next few months, that seems to be the highest interest rates because of the housing market picks up as more houses become available with school ending, and people moving.

Also depends on your market... If the market is tough (not much moving) the rate will stay low, however, where I live, the rates are rising (closer to 5%) then the rest of the US.. Rates here are moving .25 points up and down a day right now....

storm888 · May 14, 2009 8:40AM

"...Basically $8000 of what you are borrowing is given right back to you when you file your taxes next year. Never been a better incentive for 1st timers and I doubt we will ever see anything like that again...."

//////////////////

Today, Geithner said they are preparing to launch a scheme
that will "immediately monetize" the tax break.

Buyers will be credited with the FULL amount of the incentive
at closing. This means more money for down payments.

The scheme is likely 30-days or more out.

.................
.......................
.............................

I would NOT lock any rates.

Rates will go way up, but not for a very long time.

calaban7 · May 14, 2009 9:00AM

I lot of good points made here , but I'd probably would lock on asap .

The only caution , I'd have is the way the economy is being dealt with , it seems that someone(s) is despertely trying to keep the plates spinning . With the major intervention from non private interest into most major parts of our economy happening before our sleeping eyes and much more forthcoming , I wonder if the agreements being made today will be honored , when the private sector no longer controls the strings .

Good luck in what ever decision you make .----- Sonny

baseballjeff · May 18, 2009 6:59AM

Everyone who has gave me some advice on this, THANK YOU! A beer to you!

Funny story here. The finnacial lady who I've been working with told me the best she could offer me was 4.75 (but she always told me she'd match anything I found!). So, when I went to sign all the paper work I armed my guns, and found that my bank that I go though had it posted at 4.625. She then gets a little snooty with me, and tells me that "I have always told you I needed a good faith to match it" so, stressed by this, I said fine, and went to the bank. I get to the bank, and they told me, "good news, it's lower!" and they told me it was at 4.5. So I was excited by this new news, and had him run me a good faith, and I brought it back to my loan lady, and she smuged, and said, "for this, I'll need to get my supervisor's ok". So, I thought that was all pretty funny! I ended up locking in at the 4.5% and hope I made the right decision.

I feel very confident with myself, and that I did the right thing.

Thanks again everyone!
Jeff

minnesotahusker · May 18, 2009 7:26AM

You can't beat the rates now, no matter what. So I would not lock in now.

I locked in at 4.75% for a 15 year loan back in 2004. I was tempted to refinance recently, but figured I'm sitting good where I am at. My house will be paid off in 8 1/2 years...I'm hoping the wife allows me to put that $1,700/month into at least SOME cards.

ajw · May 18, 2009 7:33AM

I have no comment on current rates, but would like to point out this incredibly helpful website: Karl's Mortgage Calculator. It'll show you what a rate change will do to your monthly payment. It also shows the benefits of paying an extra $X/month to the principal. Play with it a bit and you'll learn a LOT more about your mortgage and how to best pay it down.

proofer2 · May 18, 2009 7:36AM

I'd lock in now. The difference between 4.625% and 4.50% on a $300,000 loan is $375/year or $31.25/mos pre tax. Not so sure that amount is worth the risk if rates do trend upward.

divecchia · May 18, 2009 7:38AM

I would lock in now if you can get 4.625%. As was pointed out there have been a couple of positive gains in the last 2 months on the sales of homes so I think it may not get much lower.

Donato

BunchOBull · May 18, 2009 7:40AM

I don't know about your market, but from the 50,000 feet view, I'd say you did the right thing. Congrats!

CDsNuts · May 18, 2009 7:44AM

I think you should trade your way from a village hut in Guam to your dream home. Should be a good challenge but with enough help from fellow home buyers I think you can do it.

RipublicaninMass · May 18, 2009 7:47AM

<< <i>Everyone who has gave me some advice on this, THANK YOU! A beer to you!

Funny story here. The finnacial lady who I've been working with told me the best she could offer me was 4.75 (but she always told me she'd match anything I found!). So, when I went to sign all the paper work I armed my guns, and found that my bank that I go though had it posted at 4.625. She then gets a little snooty with me, and tells me that "I have always told you I needed a good faith to match it" so, stressed by this, I said fine, and went to the bank. I get to the bank, and they told me, "good news, it's lower!" and they told me it was at 4.5. So I was excited by this new news, and had him run me a good faith, and I brought it back to my loan lady, and she smuged, and said, "for this, I'll need to get my supervisor's ok". So, I thought that was all pretty funny! I ended up locking in at the 4.5% and hope I made the right decision.

I feel very confident with myself, and that I did the right thing.

Thanks again everyone!
Jeff >>

I couldn't be happier that you are not one of my clients! Looks like a real bargain. hopefully they will deliver on closing..if not DONT SIGN, just make sure the do what they have promised/

baseballjeff · May 18, 2009 10:38AM

I did lock in, at 4.5%

Thanks everyone!

calaban7 · May 18, 2009 10:59AM

Good job , hope the best .----- Sonny

Off topic I know, I trust you all. Realestate question.

Comments