Interest Rates

That seems awfully high. How much are you putting down and what kind of credit score do you have? The rate should be closer to 6.125%

Try this site: www.bankrate.com

It covers it all, but not specifically NYC coops and condos.

Your mortgage line size is still "jumbo" to the lender, although run-of-the-mill in NYC.

The legislation passed yesterday moves the "jumbo" category from $417,000 to $617,000.

Good news for NYC buyers of small one-bedrooms/large studios with substantial down payments he wrote, cynically.

Colgin - here is the deal. Even with lower FFR and bond yields, lending rates are operating under an entirely different set of rules right now do to the repricing of risk in the mortgage markets. Housing is quite simply, MORE RISKY, then it was years ago! Investors are demanding a higher return for this risk, hence the non correlation of lending rates with a drop in FFR and bond yields.

So, in this NEW world, credit quality and individual circumstance is MOST IMPORTANT for rate quotes. There are no generalities here. Anyone that looks online at a general quote is likely to find out later that their rate is different because its based on their credit, and other factors individual to them.

So, please take this into account.

urbandigs,

What you say makes total sense and is consitent with what I read about the credit markets elsewhere. However, I keep hearing hear (and from certain brokers) that I should be able to get low 6% or even lower. But then I get a quote from a banker that is much higher. Our credit history is impeccable (I don't have the exact score handy.) Alos, we would put down 20-25% (and could probably do 30% if it helped on this count) and this is for a primary residence. I hear that should work in our favor. I would love to hear suggestions where I might find that 6.1 or so percent if that is really achievable. That would make a HUGE difference in our desire to buy today versus sitting back a little bit and seeing if inventory builds. (By the way, my last comment re inventory build really goes to having some more choices versus hoping for prices to drop.)

Colgin

A mortgage broker just told me that 6.375% should be doable as of today on a jumbo 30-year fixed in our situation.

Colgin, have you settled on a 30yr fixed product? You should be able to get a 7/1 jumbo with 20-30% down for around 5.5%

Colgin, can you tell me from which mortgage company you can get 6.375% for a jumbo 30 year fixed?
Juiceman, do you know which company will provide a 7/1 jumbo for about 5.5%?

Got a question on this subject also..

I am thinking of a coop and my mortgage guy told me that doing 5/1 ARM is a good way to go since it s coop. I dont plan to stay there more than 5 years. Shoul I go for 5/1 ARM or stick with 30 FRM?

Any thoughts?

You benefit if the difference between short term(5Y) vs long term(30Y) rate is significant-which is currently the case. I did a 5/1 2 months ago, but do what your comfort level is. Who is the mtge guy-a broker or a bank employee?

mmm33. What is a comfort level? Thats what people have been asking me when I apply. My plan is to get rid of the place and get a new one in 5 years. No one is really giving me an advice or options. I keep asking and no one wants to give me straight numbers or break down. The mortgage guy is a mtge broker. The banks that I deal with only give info on what I request.

Who can I ask for advice on this matter?

Jif I watch rates as part of my job and can act quickly if needed to refi my mtge.
Currently even though interest rates are low, mtge rates are high-so ARM is good value imo because the short term rates are very low and even taking the adjustment for risk makes 5/1 a decent deal. Try my mtge guy Bryan Siegel 212 716 6421 (works for Countrywide)
Also rates differ significantly based on loan amount currently. Very bad market for taking a loan

6.375% sounds about right to me. You may be able to go lower if you open up an account with the bank.

mmm33 that made more sense than 8 people that i have talked you. i am not taking a large (still large for my income) around 500k. I am waiting to see when the confomring limit increase would come ineffect.

I know market as whole is bad but could you explain why its bad to take a loan right now? Only for rates or economy as a whole. Since I am considering 5/1, it should really effect that much(?)

For well-qualified buyers of Manhattan Coops, Manhattan Mortgage offers very good rates pretty consistently. They came to me highly recommended and have a good reputation.

kylewest thats what I was told also but my Citibank actually gave me a better rather.

What do people think about an adjustable LIBOR? I am considering a product at Merrill Lynch that is adjustable at just 1.25% over LIBOR (currently 4.25%) or 1.75% over Libor (4.75%) but would allow me to lock into a 5 year fixed at anytime for $1K (currently the 5 year fixed is 5.125%). This would be an interest only JUMBO loan and they pay all closing (up to 1 point). I figure I could do this at basically no cost and wait out market corrections (as well as the new JUMBO limits) and potentially lower rates (they expect rates to go to 1% by '09) and then refinance into something long term when I felt like it and having saved a ton of money over the next year or two? I probably will only stay in my place for 2-3 years anyway in which case I wouldn't refinance but may want to do so and rent it out when I move. Any thoughts? Anyone else looking at something like this?

Falcon, your reasoning is sound but the one problem is that when you lock into something long term, the rate will be governed by long term rates i.e. 10 year treasury, which is at a historical low right now. The fed's rate won't have much of an impact on this as much as general market conditions will.

What about the implications of the higher conforming rates? My loan will be about 700K with 10% down but can but another 10% down (or likely just back with more securities) and have a loan value below the new conforming rates? Also, if I don't lock in and keep the adjustable LIBOR rate, it will stay at 1.25% over LIBOR so if the fed rate does go to 1%, it would be at 2.25%. I am thinking over the next three years, I could probably average a 3.75% rate if the fed rate averages 2.5% over that period.

Falcon, the Fed does NOT control LIBOR and as we've seen over the past several months it's influence has been limited. Many of the supbrime ARMs are indexed to LIBOR and the Fed can't help these people by dragging down treasury yields.
Also, northsider's point about it being unlikely to lock in a great long-term rate in a few years is important for you to consider as well. My advice is to not be greedy and lock in a long-term ARM (7 or 10-yr) for a rate in the mid-5% range.

What are people seeing in the market right now for 30 yr conforming fixed. I know chase have a .25% off the rate for its valued customers, however, their rates seem to be in line with everyone else, even after this .25% has been taken into account.

that's called marketing 101.

The market is currently quite fearful, more than a month ago. Even though FFR and LIBOR have decreased, the price of a 7/1 I/O ARM has increased over the past two weeks to around 5.625% from 5.25% two weeks ago. I'm choosing to lock in now although I have the option to relock 15 days prior to close if the rate is more than 1/8th better.

Which bank is that with small mj

jifjif-Rates comes in many flavors. Lets consider the base as US Treasury bonds (safest investment)implied interest rate, then anything that is riskier than treasury is a higher rate. Currently the margin over treasuries is very high for mortgages because the underlying real-estate collateral is considered risky. I stayed away from Mortgage brokers because they are partly responsible for the lax lending standards (Manhattan Mtge got bad press on Bloomberg 2 month ago)and they might not be able to close the deal for their clients in the present environment.

mmm33 thx

so let me ask, i see a lot of people asking for 30 fixed than 5/1 ARM. Since 5/1 lower and 30 fixed being higher, wouldnt people jump at 5/1 than 30?

Depends on the timeframe jifjif. If you know you will be in the place long term and you don't want to worry about rates in 5 years, go with a 30 or a 7/1, 10/1. If you plan on being in the place for 5 years or less, its a no brainer to go for the 5/1. Again, worse case scenario is that you get the 5/1, stay longer than 5 years, and refinance at the end of 5 years. Refinancing isn't free however, so you want to weigh the rate premium you get for the 5/1 with your timeframe and the cost for refinancing should you stay longer. My personal preference is a 7/1 ARM. Seven years is a long time to hold a property and you still get a decent enough premium over a 30 yr fixed rate to make it worthwhile.

thx juiceman that makes sense. now i gotta start comparing 5/1 and 7/1 ......

:D

mijabe54 - where are you seeing mid 5s for 7/1 or 10/1 JUMBO loans? The best rate I have found on an interest only JUMBO is 6.0% on a 7/1. Given that, I was considering the LIBOR at 4.25%. I also could lock into a 5/1 at 5.125% under that same LIBOR loan but figure that I might end up with a rate much below that for at least a couple years so even if I do stay the full 5 years, it would probably even out at worst?