F**kin Mortgage Rates!!!

Sounds like you're fvcked.

I thought you could lock in your rate as soon as the contract was signed....? why did you wait?

You do NOT have to wait for board approval to LOCK IN your rate! Most rate locks are 60-90 days and many lenders can add a grace period if your closing is scheduled for shortly after expiration. If you were on top of macro issues, or read my blog, you would have locked in your rate on May 17th when jobs data showed that there was no way fed would cut rates and in fact that US economy is fairly strong. Yields on 10YR started to rise after that and the rest is history.

Global inflation is causing foreign central banks to raise rates and our yields have been following suit. This is why you need to be educated on this stuff, so you know how to time your rate lock. The 10YR yield is the most reliable indicator as to where mortgage rates are going in very near term at a short lag.

Lesson learned the hard way. I fear that you are NOT alone and I bet many buyers out there are still clueless as to where rates have headed in past 3-4 weeks and how their purchasing power should have been adjusted for their own financial situation.

RE Investing is not all about location and PPSF. Its about being educated on all of this stuff that affects your monthly payments and affordability as well. My advice, consider a short term ARM for now, expecially if you have a 3-5 yr timeline to own. There is a possibility that rates at some point in the next year or two drift lower especially if inflation eases and global economies react to rising rates in 1-2 years time. Just a thought.

can i lock in rates now on a new construction thats not due to be built until next year?

you can but its so far out it will cost you a good chunk of change to do an extended rate lock. With that much time, anything can happen and predicting where rates are in a year is way too uncertain. I wouldnt due to cost of extended rate lock option.

It sucks, but even 6.825 is a very low rate (historically speaking).

If you went ahead and locked at this rate, your lender will probably allow you to "float down" to a better rate should they come down before you close.

I think this 6.825 is a very short spike and I would be surprised if mortgage rates would stay at this level. Kind of like a stock all of a sudden it spikes up reaches highs of the past few years then backs down again. I think technically they call to a double top.The US economy contrary to all that you read is not that strong to warrant a continuation of this.

gee, I thought the Manhattan market wasn't affected by rate changes because everyone is a gazillionaire.

ROTFLMAO

Try Wells Fargo: Builder's Best 10/1 product was specifically designed for developments currently under construction...you're locked for ten years...beyond that you're subject to prevailing rates. You can lock in the rate for 6 months with no penalty...however from the 6th month to the ninth month you'll pay a quarter point and 9th to 12th month another quarter point. In order to take advantage of this product you must provide a 1% good faith deposit which goes toward the closing. In addition, you can roll over to a 30yr fixed up to 1 week prior to closing at no cost. Hope this helps.

https://www.wellsfargo.com/mortgage/buy/loans/descriptions/rateprotection

#7 - what about prices of apts these days - are they low (historically speaking)?? I don't understand why people keep trying to convince themselves that rates are historically low - that means jack sh*t when prices are at all-time highs and incomes haven't kept up.

I love people who make the largest purchase of their life and do not reseach or homework. These people do more research on buying their new Plasma TV. How dumb.

You lock immediately on a 60-90 day lock, then every week if you have to, if rates didnt change, re-lock and start the clock over to make sure you have enough time.

Agreed - this isn't a case of hah-hah look interest rates went up - this is a case of a stupid OP who should have locked quite some time ago the minute the offer was made, or better yet, should have been pre-approved with a good mortgage broker. There's just no excuse for this kind of situation to occur if you're an informed, (reasonably) savvy buyer.

And just as a bit of recent personal experience:

I bought a new construction condo approximately 14 months ago. I decided about 12 months ago to lock in a 30 year rate at 6.75% (a nine month lock was offered) because I felt that interest rates would probably rise over that period, so it was mathematically sound paying the little extra for an extra long lock. Lo and behold, after the 9 month period expired my place still wasn't done, and so I let the loan term expire. Why? Because intrest rates on a 30 year had DROPPED from 6.75% to 6.25%. I waited a couple of months until my place was about ready, and then relocked a new 30 year rate at 6.375% for 90 days with the same company AT NO EXTRA COST because they didn't want to lose my business to a competitor at that point. We're moving in at the end of this month, and the upshot is that I'll be paying .375% LESS on the interest rate than I would have initially, which MORE than pays for the little extra for the first nine month lock.

The OP's situation was poorly handled.

Have you had your board interview yet? If not, when you do, tell them that the jump in rates has made you have to rethink whether you can afford the payments. You'd be acting in good faith, and if that prompts them to reject you, you're out of the contract with your deposit back.

What about all those who say there's "too much wealth" in manhattan?? Interest rates shouldn't matter then, right????

Interest rates always matter. People are wealthy because they DO pay attention to such matters. People are overleveraged or take out questionable mortgage vehicles because they do not.

I love how even when a thread is about a legit topic, the bitter renters who so badly want the Manhattan market to blow up (to the point I suspect they wouldn't mind it to happen literally) have to chime in with their nastiness. You guys would have been the ones picking through the pockets of those who jumped out the window during the depression.

to #17. This thread is about mortgage rates and law of ecomonics state that the higher the rates, the less money people can afford to loan.

What would be a good plan for a pre-construction condo purchase just made when expected occupancy is September 2008 (and this could be later if there are construction delays)? Thanks.