Mortage rates hit ridiculous lows this week

[Ghosty]

Just an FYI for those CSC homeowners who've contemplated refi'ing their home loan. They've been dropping over the last couple years, but this is seriously the lowest I've EVER seen, and many people think the lowest you will ever get here in the U.S.

Yesterday my co-workers got quotes of the high 2%'s on 15yr fixed notes! I saw many 3.75% 30yr fixed notes. Both with zero points, ~$400 appraisal, & up to $500 in lender fees. Just rough numbers, but you get the idea. I assume closing costs around $1500 or so, after all that. Today they actually went up an 1/8 to a 1/4, so now they're seeing 3% on 15yr fixed.

This is a good week to watch closely, every day if you're serious.

I currently have 5 1/8 on a 30yr, so it's definitely time to shop around. Obviously those rates are gonna be for people with at least 700-800+ range FICO, minimal non-home debt, adequate appraisal, and minimum 80% LTV to avoid PMI insurance. I don't work in the business, just passing the info along in case you don't watch it often enough and want to re-fi.

For starters, check:

www.BestRate.com

www.BankRate.com

www.LoansAtWholesale.com

Those are some of our favorite places to shop rates. I have no experience with the banks in there, because my main bank is also my lender and has always got me a decent deal.

[Vance]

I was pondering a 203K refi a few months from now - but was going to wait to see what my raise at work was going to be first then letting it settle in for a few months so there was history there...

BUT... perhaps I should say screw it and call my lender anyway considering that's a good 1.125% lower on a 30 year than what I'm at now - and I thought he got me a PHENOMENAL rate at the time (2 years ago).

[Ghosty]

Same here, I can actually go with a 20yr fixed and have almost the same payment as my current rate. That's awesome. But I'll probably just do a 30 again, and start paying more into principal. I like the safety-net of a 30yr, in case you ever get laid off or something. Payments are still doable.

[CYCLE_MONKEY]

Best of luck to those that can do it. I look at all this and with the realization I'll never be able to buy anything, it just sux.

[Foolds]

Call Chad's Wife.. Shes AWESOME!

Catherine Eusea
Area Sales Manager
ceusea@firstcal.net

Office: 970-372-6939
Cell: 720.300.6777
Fax: 855.502.6873
NMLS#: 237244

[Ghosty]

Call Chad's Wife.. She's AWESOME!

What's Chad's screenname here?

[mdub]

Best of luck to those that can do it. I look at all this and with the realization I'll never be able to buy anything, it just sux.

awh man...keep playing the lotto...

[#1Townie]

Hahaha here we go again. All time lows. Buy buy buy buy buy. You cant afford it? YOU CANT AFFORD NOT TO!

A few years from now. You have to buy now.. its not going to get any cheaper. Soon you wont be able to afford a house. You mean my 330k home is now worth 1.5 mill? Hell yes. Sell that bad dog. Wait your saying the house i just bought for 1.5 mill is only worth 330k??

Crash.

[tecknojoe]

I've been considering buying a house for a year now. This is such good news for me. Rates have just gone down and down, and home prices have dropped further.

I don't see it getting much lower, but I don't see it exactly springing forward out of the blue.

[grim]

I'm pretty happy with my 4% gonna refinance my car though!

[vort3xr6]

Bernanke is a moron. I have a 4.75 fixed 30 yr. it's my HOA that is the problem, not the mortgage.

[Sean]

What's Chad's screenname here?

Chad23 (I'm pretty sure)

He and his wife are good people.

[kingtut]

my HOA that is the problem, not the mortgage.

$285/month...I'm expecting it to hit $300 in 2013, sigh. To make matters worse, the neighborhood looks like trash

On a brighter note: currently locked in @ 4% with -1 point.

[mxer]

$285/month...I'm expecting it to hit $300 in 2013, sigh. To make matters worse, the neighborhood looks like trash

On a brighter note: currently locked in @ 4% with -1 point.

Yikes, I thought 62 bucks was too much. What does that buy?

[Penadam]

Yikes, I thought 62 bucks was too much. What does that buy?

Coke for the HOA board members.

[modette99]

$285/month...I'm expecting it to hit $300 in 2013, sigh. To make matters worse, the neighborhood looks like trash

On a brighter note: currently locked in @ 4% with -1 point.

And to think we have no HOA and a old guy tried to start one and claim at closing he would collect $200 from people. A lawyer in the sub let him have it and he has since for the last 1+ has had his home for sale....LOL

I asked him what will the money do for us, he had no answer. Our parks are provided for by Triview. We have zero cost. The lawyer pushing for the HOA is his friend. So he just wanted to collect money for an easy paycheck.

His complaint was weeds in the cracks of driveways, recycle bins left in front of garages, people who park in the street, and worried about what people do in their back yards. I told him to his face that he is too old and it sounded like he needed a retirement community.His response to me "why are you against it your house is fine"....so my point why would I be for an HOA they don't do much but collect money and provide nothing.

Now if we had a community pool I could understand it.

[bulldog]

People do understand you are charged fees right when you refinance? This needs to be weighed against what the interest rate would save you in the long run. Of course a mortgage person is going to tell you to do it; this is how THEY get paid. No disrespect, but people should understand that refinance is not free and it may hurt you more than help in some case.

I'll admit I am no expert, just a homeowner since I was 20 years old! Maybe I am wrong, but I was always charged fees when I did this. Not saying this can't be a good idea for some homeowners that have not refinanced in a long time.

Experts please enlighten me when it is worth it to refinance and if their are "average" costs associated with it....

[Ghosty]

$285/month...I'm expecting it to hit $300 in 2013, sigh. To make matters worse, the neighborhood looks like trash.

Wow! That's normally what you see in a newer condo complex where you're paying for a nice pool, gym, security, etc. My neighborhood HOA is only about $40/mo.

[Ghosty]

People do understand you are charged fees right when you refinance? This needs to be weighed against what the interest rate would save you in the long run. Of course a mortgage person is going to tell you to do it; this is how THEY get paid. No disrespect, but people should understand that refinance is not free and it may hurt you more than help in some case.

I'll admit I am no expert, just a homeowner since I was 20 years old! Maybe I am wrong, but I was always charged fees when I did this. Not saying this can't be a good idea for some homeowners that have not refinanced in a long time.

Experts please enlighten me when it is worth it to refinance and if their are "average" costs associated with it....

Yeah, I mentioned fees in the OP, obviously these things are going to vary by lender. Online I've seen some with very small fees, all the way up to $900, with several around $500-$700 I think. There's no such thing as a "no-cost" loan, that was a tricky saying that lenders loved to lure people with during the big real-estate boom leading up to the mid-2000's crash. Lenders would just roll all those big fees into the mortgage, adding to your principal on the note.

Try that LoansAtWholesale.com link, just to play with numbers. It lets you adjust your rate up and down (paid points), and see how all the other numbers change, including their estimated fees & closing costs.

THEN CLICK ON THE "FEE WORKSHEET" link in the middle of whichever column you are looking at. That outlays the different fees.

Regardless, there are SO MANY variables and individual circumstances, the only accurate way to get a rate is to work with a lender, have them pull your credit and give you either the preliminary estimate worksheet of closing costs, or do a "hard inquiry" and pull your full credit report, then give you a "Good Faith Estimate" which will really tell you exactly what you will pay for, including itemizing fees like: title, appraisal, tax, document fees, etc. There are several fees that vary by lender, but are usually standard and in the same general ballpark. Remember to look at what lock period they're offering too. Some are as low as 30 days which I feel is too risky. One lender we talked to offered a 45-day lock, and was seeing approximately 35 days to closing, so that was relatively safe.

Beyond what I've noted here, I'm not a lender or an expert. But I've had a mortage of some type for about 20+ years, and have re-fi'd at least a half-dozen times. In my experience, my final numbers have not varied from the lender initial estimate, by much at all. Luckily there are many laws in place to keep them from scamming people too much, especially after Obama put through new rules to protect people from predatory lending after 2010.

Whether or not a lower rate is worth it to you, also varies greatly by borrower situation, how many years you are into your current note, etc. A very GENERAL rule that some people like to mention is if you can drop a full point, AND plan on staying in this house for at least five more years. But again, that varies by the size of your note and how many years you've already paid interest into it. A lender can explain details and how many years it will take to recoup closing costs, with your newer lower monthly. Also, if you want to get out of a 30, into a 15 or 20, that should play a role in your decision.

[Ezzzzy1]

People do understand you are charged fees right when you refinance? This needs to be weighed against what the interest rate would save you in the long run. Of course a mortgage person is going to tell you to do it; this is how THEY get paid. No disrespect, but people should understand that refinance is not free and it may hurt you more than help in some case.

There are a couple of ways they can get paid and a lot of times people elect to have that either added into the repayment of the loan or by increasing the interest rate and having the bank pay them.

What a lot of people do not understand is what refinancing does to you payment structure....
When you first get your mortage vary little of what you are paying each month goes towards the principal repayment, while a good majority of the payment goes towards the interest payment (say 10%/90%). As the years pass the scale starts to tip towards making more of a principal payment and less towards interest. So if you are in say year 5 of your repayment you are in a much higher principal payment percentage than if you refi (because when you refi the scale is reset). All in all if your main goal is to pay down the principal then you would be hurting yourself by refinancing. A lot of people miss this because they see that they can save $300! a month and jump right into it but most experts would say that its not worth refinancing for less than .75 if you have been in your current mortage for more than 3 years.

Also for people that have never heard of by monthly payments, that is the way to go if you can afford an extra few payments a year. Basically it works like this: instead of making 1 monthly payment (for a total of 12 a year) you would make two half payments each month (on the 1st and 15th). So not only are you making an extra 2 half payments (or 1 full payment) a year (and over 30 years thats a lot of money) but the second payment of each month go 100% towards the principal repayment, so you are paying the most important part of your mortage at a higher rate.

Confusing, I know. But if you are going to stay in your house for a while (5,10,15+ years) then it honestly is worth looking at.

If you dont want to do that but have been in your house for 3+ years and you can afford a 15 year mortage.... and thats when the fun starts. Imagine having the deed to your home in 15 years!

[modette99]

I haggled on our fees when we refinanced through Chase...it was such a botched thing that I was in contact with some higher up (VP???) that actually waived the fees to make us happy. Then again we already had our banking with them so they saw $$$$ as a potential loss for them if we decided "bad experience" and picked up and left totally.

Our refinance dropped the second mortgage and rolled it into one 30 year (we were already 30 years anyways) and it saved us $600 a month and made it so it was one check send out vs two every month.

The thing you need to be careful about is are you going to appraise without needing PMI or putting a large part of cash down. I forget the numbers but I guess we were like $3,000 short of not having PMI which if I remember is a % of your homes value. So lucky for us we handed them $3,000 and thus still avoided needing PMI. But with house values drastically reduced you might be surprised to find out with the new appraisal you now need PMI or have a sum of cash to pay it down to not have PMI.

Also appraisers are hit and miss. Our lady that came out was very nice, and liked my upgrades to the home and the plan forward. She also liked we just put a new roof on, and the updates set our house apart from the others in the neighborhood. She also did not use Foreclosed homes as a comparison. She also liked I knew what other homes had gone for, and were listed for...which I pointed out and she jotted those down to take a look for the comparison. Be nice to these people, they are the ones that will decide...

Clean your house up, have little issues resolved like paint and carpet and what have you. Place looks trashy they know your not taking care of it, thus it will only go down in value later on.

She also liked that I was not desperate to refinance...LOL I'm sure they see so many people that NEED the money. Pretty much I explained that if we could save money great, if not no big deal we can afford the payment, but would like to take the savings and dump it back into the house. Which shows, your making your house nice....and that you have a plan for your house.

Hope some of the pointers help someone.

[modette99]

There are a couple of ways they can get paid and a lot of times people elect to have that either added into the repayment of the loan or by increasing the interest rate and having the bank pay them.

What a lot of people do not understand is what refinancing does to you payment structure....
When you first get your mortage vary little of what you are paying each month goes towards the principal repayment, while a good majority of the payment goes towards the interest payment (say 10%/90%). As the years pass the scale starts to tip towards making more of a principal payment and less towards interest. So if you are in say year 5 of your repayment you are in a much higher principal payment percentage than if you refi (because when you refi the scale is reset). All in all if your main goal is to pay down the principal then you would be hurting yourself by refinancing. A lot of people miss this because they see that they can save $300! a month and jump right into it but most experts would say that its not worth refinancing for less than .75 if you have been in your current mortage for more than 3 years.

Also for people that have never heard of by monthly payments, that is the way to go if you can afford an extra few payments a year. Basically it works like this: instead of making 1 monthly payment (for a total of 12 a year) you would make two half payments each month (on the 1st and 15th). So not only are you making an extra 2 half payments (or 1 full payment) a year (and over 30 years thats a lot of money) but the second payment of each month go 100% towards the principal repayment, so you are paying the most important part of your mortage at a higher rate.

Confusing, I know. But if you are going to stay in your house for a while (5,10,15+ years) then it honestly is worth looking at.

If you dont want to do that but have been in your house for 3+ years and you can afford a 15 year mortage.... and thats when the fun starts. Imagine having the deed to your home in 15 years!

This is why you always pay more then your payment. Lets say you refinance a $2,200 mortgage (I think what ours was). And now its $1,600...you don't just pay the $1,600 you still pay the $2,200....I think we pay $2,000 so $400 more a month then required. Our principle has gone down pretty damn good and fast. Idea is to pay off the home ASAP...imagine $1,600-$2,000 in your pocket every months. Every 6months you could buy a new motorcycle in cash...LOL Savings in life then really starts to take off.

[Ghosty]

Good points Ezzy & Modette. As for PMI, your LTV (Loan-to-Value) ratio needs to be 80% or LESS. So just throwing out some random figures:

Your home value: $300,000
Mortgage needs to be a MAX of: $240,000 (80% of 300k)

IF you ask for a note any higher thank $240k (higher than 80% LTV), then you will incur PMI (mortgage insurance), which can vary, but usually around $150/mo. I think. That's ON TOP OF your principle, interest, escrows (prop.taxes), homeowners insurance, etc.

Another example:
Appraised home value: $200k
Mortgage needs to be: $160k or less

If you enter your info into that LoansAtWholesale.com site, it'll show you your LTV in the top-left. Then you can adjust your finance amount accordingly until you get down to 80% or less. That will tell you how much cash you need to bring to the table to avoid PMI.

I never seem to get the best deals from Chase or Wells. Online brokers seem to have the best rates, but be careful, not all are reputable, and not all can be relied on to do everything ontime and not leave you hanging come closing time. Just do your research, and check the fee schedule closely.

[Foolds]

Chad23 (I'm pretty sure)

He and his wife are good people.

Yep Chad23.