Mortgage rates plummet

[Danno]

Other than not having a 20% down payment, hes done everything right. Hes calculated out the total costs with insurance and all the other bs involved, and he can afford it. Noone should have to give up on owning a home just because they might lose their job in the future. Noone plans around losing a job. If that were the case, unless you won the lottery, inherited, or some other form where you paid straight cash for the house, NOONE WOULD OWN A HOME.

I'm not sure I 100% agree with "nobody plans around losing your job". While I don't think that hypothetical scenario should prevent one from buying if the current job is stable, any smart buyer also does his damnedest to quickly build up a savings cushion. I think they say you should have 6 months of payments on hand or in fairly liquid assets (I have about 5). I didn't start with that when I bought (put 5% down, which was almost all of my money) but I have tried to build it up.

[Danno]

Hmmm. I'm leery of these historically low interest rates. Props to the folks that can functionally use them.

And by that I mean the bankers and investment clowns that created this economic shit show in the first place. As long as the people who fuck around making money off these loans don't try to create hysterically unrealistic profit derivatives from the loans, fine.

Otherwise, nothing has been learned.

Be very careful of things that seem too good.

Can you explain? Are you talking for the overall long term health of our economy? Because I don't know what there is to be concerned about if you're a person looking to refi into a 30 yr fixed at a low rate.

[Buster Highmen]

Can you explain? Are you talking for the overall long term health of our economy? Because I don't know what there is to be concerned about if you're a person looking to refi into a 30 yr fixed at a low rate.

Yes.

You're only thinking about the consumer. I wrote about the bankers.

A big part of the reason we're in this economic problem is because the bankers and investment clowns created investment vehicles based on bad loans at low rates.

[Hugh Conway]

If hookers only charged $20 would you fuck them?

Hookers do charge $20, and no, I didn't fuck them.

[woodstocksez]

A big part of the reason we're in this economic problem is because the bankers and investment clowns created investment vehicles based on bad loans at low rates.

Agreed, but I don't think it's naive to believe that's been reigned in significantly and will be for the foreseeable future. (It better be.)

According to the news, the recent low rates have been driven by the recently announced Fed programs. I'm not troubled at all by low fixed rate mortgages. I think that may ameliorate this mess.

[4matic]

ten year note dropped below 3% today.

http://www.quote.com/us/stocks/chart...artUi.minutes=

[H0G]

They said on the news this morning that they believe the Denver market bottomed in the spring.

The REO market has just started to slow down in Denver. We hear a few different rumors about that though. Some say the decline is because banks can't afford to go through the foreclosure process. 12-18 months is the projected timeline for this thing to turn around in Denver.

[Mikepemulis]

Some say the decline is because banks can't afford to go through the foreclosure process.

Really? That's kind of scary, if it's just a lack of funds, no? What are the other explanations for this? The inventory hasn't yet dried up, right?

12-18 months is the projected timeline for this thing to turn around in Denver.

By turn around do you mean "hit bottom?"

[Benny Profane]

He is a simple example of why you or anybody else in your situation could get into big trouble very quickly. Again, I am not implying that you would do this, but your situation makes a good example.

You buy a house for $300,000 dollars, which you can afford the payments on currently. Next year due to the current housing crisis that same house is worth $250,000, but you owe. $289,000 after your down payment. Your wife loose her job, or has her hours cut back. Values continue to fall. Suddenly you are stretched to make the payment, so you are late on your CC payment. Suddenly your 12% CC debt is now 33% stretching you even further. A pipe in your foundation just broke, and now you are faced with a $2,000 plumbing bill. You have no equity in the house, so no equity line of credit. Your credit sucks, so you can't get a loan. Soon you are stretched a little more, et cetera. Pretty soon it is easier to walk away from the house then it is to keep it. Since you only have $10K into it, it makes the most sense financially. Another house goes into foreclosure in the neighborhood, and more values fall. And so it repeats.

Exactly. And, unless you've just signed a iron tight 6 + deferred year multi million contract with the Yankees or have something really secure like cop, fireman, defense department troll, post office worker, etc. (because those are the only secure jobs right now - civil service or military. Don't kid yourself that all others are not on the table. Just ask a kid who spent the last 8 years for the MBA prepping up for the world of finance, or an lowly auto parts maker), you can be in deep shit pretty quickly if your cash flow stops when unemployment calls. And since assets are deflating, you won't be able to leverage off of anything to get you through a bad patch. This is happening to millions of Americans right now, and will only get worse for the next 12 months. Not the kind of atmosphere I would want to make the biggest financial decision of my life in. Wait for the dust to settle, and your career is solid.

Of course, if you're milking a trust fund or Grandmum just left you a big present, then, uh, never mind.

[Benny Profane]

Yes, I can get a $40,000 2 year old SUV for 15k. I can buy a lot of $5.00 gas for $25,000.

You didn't get my point. Nobody is buying cars, period. It wasn't 4 dollar gas, it was/is the shutdown of credit. And not at the dealer. People can't tap the house for the 50 thou machine anymore, like they've been doing for close to 25 years.

[bagtagley]

So, instead of jumping on an historically low rate and a house that's in foreclosure, I'd be better off waiting a year when the rates are higher and that house has been bought, renovated and relisted at a premium? Yeah, that makes sense.

If only I had the job security of a cop, then it might be reasonable of me to plan for the future.

[InspectorGadget]

For the record, I'm still in the mortgage business. However, unlike some of my competitors - past and present - I'm making loans to people who can actually make the payments. What a novel idea.

I thought that was the case but wasn't positive, but I am pretty sure you're right. When I finish my renovations all I have to do is get the appraiser to come over and tell me that I've got 20% equity and my PMI disappears

Sorry, wrong. It doesn't work that way.


For all you people that said you had contacted your mortgage guy; I apologize for missing your call. Please try again.

[Benny Profane]

So, instead of jumping on an historically low rate and a house that's in foreclosure, I'd be better off waiting a year when the rates are higher and that house has been bought, renovated and relisted at a premium? Yeah, that makes sense.

If only I had the job security of a cop, then it might be reasonable of me to plan for the future.

Listen, dude, relax. You're thinking like it's 2004. It's not. Soon, it will be 2009, and from that point on, '08 will go down in history alongside 87, 99, 01, and, of course, 29. You're living through a very important time in history, an important moment your grandchildren will study if they're smart and have good teachers. The party is over, and, really, the best you have to hope for is that America can prove to the world that it's form of democracy led capitalism is healthy enough to attract the world's capital to both support the new trillions dollar deficit and fund whatever we say is the new direction in said capitalism. That, son, is one pair of really big shoes to fill.

The Japanese stock market went from somewhere around 30000 to 8000 when their real estate bubble crashed, and is still there and dropping. They have essentially been in recession for a very very long time. And those people save a whole lot. A whole lot. Last year our savings rate was negative. You tell me who will fund the future. Not us.

[Tippster]

Hookers do charge $20, and no, I didn't fuck them.

In the USA? Man, the Economy sucks!

[rideit]

The Economy is currently giving us a $5.00 blowjob.

[cramer]

Exactly. And, unless you've just signed a iron tight 6 + deferred year multi million contract with the Yankees or have something really secure like cop, fireman, defense department troll, post office worker, etc. (because those are the only secure jobs right now - civil service or military. Don't kid yourself that all others are not on the table. Just ask a kid who spent the last 8 years for the MBA prepping up for the world of finance, or an lowly auto parts maker), you can be in deep shit pretty quickly if your cash flow stops when unemployment calls. And since assets are deflating, you won't be able to leverage off of anything to get you through a bad patch. This is happening to millions of Americans right now, and will only get worse for the next 12 months. Not the kind of atmosphere I would want to make the biggest financial decision of my life in. Wait for the dust to settle, and your career is solid.

Of course, if you're milking a trust fund or Grandmum just left you a big present, then, uh, never mind.

My career is solid for another year, hehe. We just did the round of layoffs. We cant get any thinner than just me out our site, lol. Unless they dont want any IT support for the 1500 users i support, i'm probably going to be ok. I support 4 different lines of business and 2 of them are hiring, not firing (call centers). Either way, you can go through life thinking the worse is going to happen to you or you work hard and have confidence that you are a valuable employee and you'll be fine. 9 years of hard work and ive seen everyone and their grandmother laid off. Could i get laid off? sure, but i dont see it happening for the next couple of years. If i was to get laid off this year, id have 5 months of pay, unemployment, 18 months of medical paid and we've got 3 house payments in savings after the purchase. That should be enough cushion for me to find a job.

I paid about 42K in rent the last 2 years. I paid 48K the 2 years before that and what do i have to show for it. Jack fucking shit. Pretty much a no brainer to buy a house right now while the getting is good. Its a bidding war out here. We looked at tons of houses. We'd go to put offers on some, 10 people already put an offer on them. Home sales rose 42% out here compared to last year. We may not have hit rock bottom, but there are still plenty of buyers right now. Its the bay area, you wont see these prices for another 15 years again. Its now or never for me at this point around here. Hopefully in 15 years once my kid goes to college, we can sell, pay cash for a condo and call her a day. That would be in the perfect world. But hey, you could be right. we both get laid off, and where am i? Nowhere different than i was, renting again.

[hutash]

^^^You have obviously put a lot of thought and effort into this, good onya. It may very well be the right time for you to buy, and if it is good luck. The problem is because of all the people who didn't think about what they were doing, or were just sheep following the trend. I bought my present house in the middle of the last downmarket, and it was a good time for us to trade up. For others it was not such a good time.

The bottom line is there is no such thing as the best or worst time for everybody, but it all depends on ones situation.

[meatdrink9]

Nice to see a little bit of optimism out there.

[powbmps]

Just locked in at 4.875 (25 year/no points) for a refinance. 30 year is the same rate. That's pretty damn good.

Yipee.

[willywhit]

We're on the verge of signing up for another 30 year mortgage and it's amazing how much less the bank will be willing to loan us.
same credit score, same income and we didn't default on anything.
oh well, at least we're getting a great deal.
paying PMI ain't no thang.

[mitch buchannon]

We're on the verge of signing up for another 30 year mortgage and it's amazing how much less the bank will be willing to loan us.
same credit score, same income and we didn't default on anything.
oh well, at least we're getting a great deal.
paying PMI ain't no thang.

What LTV they quoting these days? We're like... 25% through a renovation. Not a chance I would pass an appraisal right now, but I'd love to refi and knock a percent off and get out of PMI.

[sfotex]

Looking at 5% 30year fixed today. Don't know if I want to wait a few more weeks before I lock in though.
Anyone have a crystal ball?

[cramer]

Looking at 5% 30year fixed today. Don't know if I want to wait a few more weeks before I lock in though.
Anyone have a crystal ball?

they are suppose to be hitting like 4.5% from what ive read. Whats the price of your house. .5% less was 70 bucks less a month on the 230K house i just closed on today finally. 5% is good. I was at bofa branch today getting cashiers check and they had a board up and their rate was 5.87. Which they suck. I work for them and didnt get my loan from them. Thats pretty sad i got a better deal elsewhere. I have no crystal ball, but it doesnt seem the rates have bottomed out yet.

[Danno]

Everyone keeps saying 4.5% as if the feds have control over mortgage rates. I say lock in at 5 if you can.

[Mofro261]

Where are jumbo rates at/heading? I locked in at 5.75 fixed 30yr in March 2005, but a quick check doesn't show anything better than that right now. I don't remember the spread between conventional and jumbo being more than 0.4-.5 back then.