Mortgage Rates Down... where to next?

Wait...they will go down further...as Freddie/Fannie auction more bonds over the weeks, they will find they have to pay a lower yield (in line with Treasuries) and thus the lending rates should go down as well....I would think 5.75%, but like you said no one knows....

Also, if inflation moderates this helps as well....the reason we had the big spike up as because of inflation, but that looks to be easing as well....

The good news, in the short term you have seen the highest rates....so I think waiting is not going to hurt you....

6 months from now I think might be a different story

How much are you borrowing? How much are you putting down?

This is a "small loan" by RE standards: 20% down, borrowing a bit under 300k

Considering I almost locked in for 6.5% (then there was a 1 month delay due to coop scheduling), 6% looks good. And 5.75... wow. I'd love that! At least until it went to 5.5% a mere 3 days after I lock... lol

To put things in perspective, I have a 4.9% 30 yr fixed (2003). I got this at the same time, people were actually getting adjustable/interest only mortgages . That just highlights how stupid people actually are.

WOW, dco, thats a great rate. My current mortgage is at 6.12 and I got it in 2002. I guess rates dropped after I purchased (I stopped paying attention... though maybe I should have looked... I coulda refinanced maybe).

a zero point conforming 30 year fixed is currently at 5.75%.

hi..which lender is offering 5.75 % no points ?

Try zillow mortgage:
http://www.zillow.com/mortgage/Mortgage.htm

it's a great tool.

Also, locally, Garden city mortgage tends to have very low rates and very low lender fees. The only issue is that they lock for a very short period.

www.gardencitymortgage.com

Personally I have not seen a 30 year conforming for 5.75 (maybe 5.88) but countrywide may kno best.

countrywide, is the name just for fun or do you actually work at countrywide?

Wells, the largest mortgage bank is offering 5.75% as of this morning. I locked in at 6.5% over a month ago. I blew it. What can I do now? Any suggestions?

https://www.wellsfargo.com/mortgage/rates/

Junkman, I'm assuming you don't have any kind of float down option. If not you can just absorb whatever costs you've already paid and go to another lender. .75% is quite a difference and will probably be worth it. Obviouslt the longer you plan to stay there the more benefit you will get. I'm seeing 5.75% also on a 30-yr fixed. I didn't think it'd drop this low.

fedup,

I have a float 60 days prior to closing. Expected closing is April 30th. Long time to wait to see of rates stay the same.

Junkman, you can always try negotiating with the bank and seeing if they'll just give you the lower rate. I've had some success negotiating with banks directly. I mean, you can always go somewhere else, so their incentive would be to keep your business. If you're borrowing up to the conforming max, the difference between the two rates is ~$200 a month. I'm by no means an expert (just a first time buyer) but I jumped at getting 5.75%. If you go somewhere, try to get a free float down without any stipulations. I didn't go with some lenders because of the limits on when you could float down.

If youhave a long term lock (sounds like you may have 12 months). Then you will not get 5.75 - the best you'll do today is probably 6% or 6.125.

By the way, the 5.75 that WF quotes it with a full point upfront (read the fine print below).

Junkman, what did you pay to lock at 6.5%? 1pt 1.25pt?

Sorry for the tough luck, I would try negotiating with the bank too but on those long term locks they know that the chances of you walking away are pretty low withthe amount of money that you have to put down.

fedup, what do you mean by no stipulations? Have you found someone that is willing to give a long term lock where you can float down at any time? If so, are you required to pay points (how many) and what rates are youbeing offered? At the rates you are quoting I presume that it's conforming?

lobo, good point. If Junkman's closing is not until April (which I glossed over in my excitement) a longer-term lock will be higher. Not sure what the rates are that far out. If it's 6%, that's still 1/2% which is still nice. For a 60 day I'm seeing 5.75, 0 points and no stipulations for 1 free float down. Stipulations I've seen are, it has to be within 30 days of closing, greater than 1/4% (or something similar) or points. If you're working with a broker you might have even more options as they can just go to a different bank. I've also seen 5.6-ish (sorry I forget the exact number) for 1pt.

Lobo, I work at Countrywide. Today's conforming rate is at 5.75% with 0 points on a 60 day lock or 5.625% with .25 point. Assuming good credit, etc.

WSJ says the mortgage rate drop is akin to a 10% price drop. Lets hope it sticks.

we were are supposed to close on friday, we had locked at 6.375 no points and yesterday we were able to get 6.125 also with no points, we had the broker go back to chase to try to get us the 5.85 that they are offering todaya nd were told no, we can only renigioate once, is that true ? do we have any other options ?

sfo, what did you pay to lock? you could easily get a loan for 5.75 today with no points. You could even possibly find someone that will give it to you for 5.5. That's 1/2 a point. You should consider walking away from your previous lock. If you tell that to the bank they will probably be willing to negotiate with you ... just be prepared to walk away if they don't. On a 417,000 conforming loan you are talking around $200 per month --- so even if you put down $4,500 you would make up for it in 2 years ... and I can't imagine that you have given more than that to the bank to lock.

we didnt give any money to lock, i just feel bad for the broker

it's not your fault that the government decided to take over fannie and freddie. If you don't have anythign down then nothing should stop you from getting a new mortgage. In fact, if the broker is not willing to work with you on this then you should not feel bad at all. You are going to end up paying an extra $200 per moth for the next 30 years so that they don't feel bad? That's $72,000 over 30 years. Anyhow, that's just my opinion.

p.s. - as of the end of day, average rates are now under 5.7 - I now have little to no doubt that you can find a mortgage for 5.5%

roykirk1- My original was 6.0 I actually had not thought of a refi, but a friend gave me some good info and it led to that great rate. It actually doesn't even pay to pay off the mortgage. I guess when I start to lose the tax benefit I'll consider.

FYI- I had a heart to heart with a co-worker today. He told me he just received a letter in the mail that is adjustable rate was going to cost him an extra $600/month. He doesn't know how he is going to pay it. He lives in the burbs and works in the city. Adjustable resets are going to wreck havoc in this area in the near future.

lobo..thanks..you are right, i will talk to them tommorow if it goes to 5.5 that is a 600 saving for us

I locked in to a 12 month at 6.5 ending in Aug. 09 for a condo that is scheduled to be completed in April 30th 2009. I paid a half a point for the lock. The good thing is I decided to take out a $357,800 mortgage with the remaining being paid via a large down payment and HELOC. Still $1789. but not the end of the world.

At this time I think I will wait to see what interest rates do and probably exercise 60 day to closing float down if interest rartes stay where they are or go lower.

Yes Junkman, you are looking at it the right way. The long term rate lock is really more of an insurance policy, it is not intended to get you the best rate possible. You can't worry about where current rates are. You have to look at it and say "I'm buying myslef protection in case rates go way up unexpectedly (or as expected) - I will be in good shape if they do and otherwise, I will just be in the same boat as other people closing at the same time with a float down"

good luck sfo

Thanks Lobo for the reassuring statement. Enjoyed reading yours and fedup's intelligent discussion. I'm convinced that most buyers don't pay enough attention to developing a mortgage strategy that will work best financially for them. I did my homework but just fell a little short in my execution. Timing off by a month.

It is amazing how few banks offer locks exceeding 6 months. Wells Fargo's 12 month lock at .5 points is the best I could find out there. For what it is worth, if I had locked in yesterday morning, I could have got the 5.75 30 year fixed at 0 points with decent fees. We all know from experience that interest rates are not the entire story. Some advertise low rates but compensate themselves with back end fees that are higher than they should be.

Junkman, glad you found our discussion useful. It's always refreshing to see a useful discussion instead of the ridiculous bickering/posturing that goes on here. And that's a good point about rates. I guess APR is a more accurate number. I had one lender tell me that legally they have to tell you what the APR is, although I had never even heard of that until after I had talked to a number of lenders. Anyone know what to look out for in terms of fees and such? Or rather who might be charging ridiculous fees? With so many fees going to who knows what it's hard to compare.

I would say that all-in costs (many lenders do not consider their legal and appraisal fees to be "bank" fees) should be under $2,000. Some lenders will go as low as $800 for all of their costs. BofA has a no fee loan but the rate is nearly a full point higher than the daily rate ... so that's not such a good deal after all. Minus legal and appaisal fees you should be around the $1,000 mark and no more.

What you need to watch out for are banks that advertise a very low rate with no points but then want to charge you $4,000 in lenders fees (then you may as well pay half a point).

As I stated regarding lawyer and appraisal fees. Just make sure that you ask you perons what "ALL" of the associated fees are with the bank ... even if they are not necessarily "bank" fees. Just make sure that you ask over and over again so that you don't get a surprise at closin when they suddenly presnet you with additional costs that you were not expecting.

Obviously keep in mind the other costs not associted with the bank:
1) Mortgage tax.
2) NY state and NYC tax.
3) if a new construction you will most likely need to pay the transfer tax.

anyhow, that gets complicated. depends on if you are moving into a construction, condo, co-op etc. That is a question that your lawyer should answer.

Wells has a flat fee of $1000 excluding 3rd party cost. My guess is that this is somewhat average to maybe a little high.

Junkman, that doesn't sound too bad. What 3rd party costs are there other than appraisal ($400-$600)?

Bank of America has the no closing cost deal. I received the good faith estimate and it indicates how they will cover all the closing costs with the exception of the mortgage tax and transfer taxes. They even pay for my lawyer. The rate is 1/8 higher then the norm, but I don't have to pay for PMI even though I'm just putting 15% down.

fedup, the banks legal fee is typically a 3rd party cost as well. as much as $1,000

Daerox, what do you consider "the norm" my experience has been that BofA rates are in the high 6's on a conforming loan.

You can get 5.5% on a conforming today...that's not 1/8th less than the norm. Unless you have a better rate.

Where can you get 5.5%? Best I can get from my bank right now is 5.875. I was holding out for 5.75 but he could only get me that with 30 day lock, and I need 60.

Well I got a rate of 6.25% 3 days ago before the big drop. I'm not to sure what they have it at now; I would guess below 6.0% Either way, I would end up paying less with paying a higher interest rate and no PMI.

try zillow.com
some of the streaming quotes are still coming in at 5.5 although most are now at 5.75

roykirk1, countrywide (see post above) was offering 5.75%, 0 pts on a 60 day lock, not sure what it would be now.

Thanks for those who suggested zillow. Cool site.

However, I signed up and got 4 quotes, all at 5.75. Dunno who is getting 5.50.

roykirk, I was seeing 5.5-5.625 on a 30 day lock, not 60. If someone sees 5.5 on a 60 please post here as I that would be great.

yup, rates did go up a bit today.
Anyhow, good luck ... zillow is a cool site.

Rates ended at 5.875% today on 60 day lock. Still can get 5.75% in certain condos with special we offer. For those looking for no pmi at 85% financing itll be 6.125% or 6% in certain condos. Rates are low but will be very volatile these next few weeks. Timing will be key and if you are purchasing in a new development, you should really consider a long term lock with a free float down option. Its as close to a win-win situation you can get to. Protect yourself and your investment. sunny_hong@countrywide.com

Lobo, are you getting your quotes from Zillow? I don't think that's a very reliable way to price. I can go on right now and offer whatever rate I feel like with no ramifications or commitment to deliver. The site is a great concept but from what I've seen it's nothing more than a glorified bait and switch site. Please correct me if I'm wrong.

I have a few friends who have gotten very good rates through Zillow.
You can't go by the averages but I find that the actual quotes that you get a typically very accurate.

It's like ebay - as a lender (or merchant in the case of ebay) you want to have a good rating, you get that based on your quotes (are you offering a good rate? is the rate that you offer real or do you get jerked around when you finally call?) -- have you ever used ebay?

Anyhow, it is a great tool in the sense that it allows you to quickly compare many different quotes if you get one that is not good then you immediately move on to the next one.

Personally I think that it is a very good tool. But that's just my opinion.

You can say that you go on and have no commitment to deliver or ramifications but how is that different from on online banner ad or newspaper ad or calling a mortgage broker and having them quote you something but then the good faith estimate turns out to be different from what you had agreed to???

In my mind it is the same thing but it allows you to compare more easily...and the ramification is that somone will just not use you and move on to the next offer.

I HAVE 5.5% ON CONFORMING AND 5.625% ON AGENCY JUMBO ($729K LOAN AMOUNT), daniel

I tried zillow briefly and liked it, although I can see how it could be a mixed bag depending on the lender. There is a lender feedback section which is nice. I think it's useful to get a general idea of what rates are available and I like the idea of lenders contacting me instead of having to contact them (such as Commerce and WF who couldn't be bothered to return my calls). Can anyone confirm dledven's numbers?

fedup----Confirm? if you like, call me to discuss to 646-419-4192.Daniel

dledven, any points?

Wow, 5.5 - 5.625% rates. That should help the studio and one bedroom market shouldn't it?

dledven the 5.625% ON AGENCY JUMBO is for a 30 or 60 day lock ?

Lobo, I didnt know about the rating section, thats a great idea probably helps keep the low ball offers in check. I will have to check it out closer.

Dledven, what ltv, credit and terms are necessary to obtain those rates? What are the broker fees?