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Author Topic: Mortgage Interest Rates really LOW
Euroskimark3

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Mortgage interest rates are at all time lows. The rates I have been seeing are even lower than 1-2 years ago. Anyone out there with a morgage in the upper 5% or lower 6% range should definitely consider refinancing now. With par rates around 4.25% to 4.50%, you can definitely break even within ~3 years. Anyone planning on living 5+ years in their current home will definitely save money in interest in the long run.

I refinanced last year from 5.875% to 4.75% on a conventional 30-year fixed mortgage and thought that was a great deal. Now, the deal is even more amazing. As low as rates might be, it's not worth it for me to refinance again (unless we drop to like 2% which I doubt will happen), but I highly encourange anyone who has not jumped on the refinance bandwagon to jump on now.

Here are some current rates from Wells Fargo:

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

I highly recommend going to Bankrate.com for articles regarding whether refinancing is right for you ... or the pros and cons of refinancing ... or other great finance articles.

Good Luck All!

Posts: 69 | From: USA | Registered: Apr 2002  |  IP: Logged
diddyp
Have lance, will travel
Member # 19

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Man, those rates really make me wish I was ready to buy a house. Hopefully they'll stay low a little while longer.

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Posts: 3037 | From: Champaign, IL | Registered: Apr 2002  |  IP: Logged
Griegs
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I'm waiting to hear back from Chase now to see if it's worth refinancing.
Posts: 1934 | From: Champaign | Registered: Sep 2003  |  IP: Logged
Euroskimark3

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Because of the market plunge in the past two weeks, mortgage rates have gone down. When investors see a sell-off in the stock market, then they move towards Mortgage Backed Securities (MBS) which are safer investments. Because much money has been put into MBS, mortgage rates have gone down in the past few weeks. Other economic factors such as poor job growth, a sluggish real estate market, and turmoil in Europe has also been a huge contributing factor to the recent low mortgage rates.

I think Dan that rates should remain relatively low in the upcoming months as long as inflation doesn't pick up in our economy. We have been printing a lot of money so that is always a concern for inflation ... but then again, Europe has also been printing a lot of Euros.

Glad to hear Griegs that you are investigating the mortgage market. I checked Wells Fargo rates today and they are up a little from last week. It appears that 4.5% is the current par rate. Make sure Griegs that you shop around many banks like US Bank, Wells Fargo, Chase, Bank of America, Citi Group, Country Financial, etc. My two personal favorites are Wells Fargo and Chase. When doing my refinance shopping last year, Citi Group and Bank of America sucked, but that can be different now. One day a bank has great rates and low fees, while the next day, week or month it may not.

When shopping around, it is important to call different lenders in the same day and ask about all the different fees and rates. This way you will get a pretty good apples to apples comparison. Because the market is so volatile, calling different banks the next day may not give you an accurate comparison.

Another key suggestion I have is to shop for your own Title company. Don't use the bank's title agency because they will rape you with large fees. The bank cannot force you to use their title company. However, they can force you to use their appraising company. Some good title companies out there are Republic Title, Ticor Title, Chicago Title, American Title, and more. I used Republic Title in Rolling Meadows to do my title check as part of the refinance.

As they say, "If you want to get something done right, you gotta do it yourself." Same goes for saving money. Everyone is out there to nickel and dime you. If you are trying to figure out if refinancing is right for you, then the rule of thumb is: if you can get at least a 1% drop in your mortgage rate, and you plan on living in your house for at least 5 years, then refinancing is right for you.

Bankrate.com has a lot of great mortgage/refinance calculators, so feel free to make use of that website. Getting an opinion on refinancing from a lender is ok, but I would approach it with skepticism. The more hard work and sweat you put into getting all the info yourself and doing all the work yourself, the more money you save in the end.

Sorry for the long response, if there is anyone trying to find a certain finance article related to mortgages or certain mortgage calculators, let me know I will post the direct link to them.

I don't like to see banks take advantage of people, which is why I like giving advice and supporting it with PH.D. articles written on Bankrate.com.

Posts: 69 | From: USA | Registered: Apr 2002  |  IP: Logged
Griegs
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We have ours through Chase and their rates are currently right where you said they should be. Nobody called me like they said they would. I'll have to go in tomorrow.

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"Okay---so what is your point in doing any of this? Most people would sooner kill a person than an animal---most of us know that, I don't see that you're saying anything new or original."

Posts: 1934 | From: Champaign | Registered: Sep 2003  |  IP: Logged
j0n
resident cyclist (aka - dude w/ the pole)
Member # 11

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A lot of people (me & wife included) cannot refinance because home values tanked. If I tried to refinance, I'd have to pay a large amount of money towards principle ($10K) to get my loan to value ratio near the 95% mark even though we've paid down the original principal by about 30%. On top of that, the PMI bullshit would come into play which would just piss me off. If, however, I was a fuck up and was way to poor to afford the house, I'd qualify for all sorts of nice government bailouts like refinancing with a loan to value ratio > 100%.

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Ninety percent of the time it doesn't happen, and probably it's just as well it doesn't, though if you can't get a level of candor on sex and you choose to behave instead as if this isn't ever on your mind, the male friendship is incomplete
P. Roth

Posts: 1355 | Registered: Apr 2002  |  IP: Logged
SkyRat
Resident Director of Personal
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Also, if you plan on making principle curtailments (IE paying extra each month to pay down the principle faster) it may not be worth it.

The larger your mortgage amount, the better it is to refinance. My place, being relatively cheap, will not realize much gain by refinancing compared to the new closing costs. Most other people here who have a mortgage probably don't have large loan amounts so it may not be worth it depending on your loan amount and the interest rate delta. Do your homework, the bank certainly won't do what is best for you - although I called Chase a month or so ago about refinancing and with the rate they could give me, it came out to not be worth it (this coming from the loan officer, surprising).

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Posts: 2524 | From: BFH | Registered: Apr 2002  |  IP: Logged
SkyRat
Resident Director of Personal
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BTW, your payment schedule also resets. So if you've made 3yrs of payments already and have 27yrs remaining, it will reset to 30 (assuming a 30yr fixed). This means the ratio of principle paid vs interest will reset. If you're planning on living there for a while and have not lived in your home for a while it makes sense.


Rates are VERY low now though. . .

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Posts: 2524 | From: BFH | Registered: Apr 2002  |  IP: Logged
Euroskimark3

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I totally agree with Dave's comments ... you gotta do the math yourself and look at your own individual situation. In my previous post, I simply threw out a "rule of thumb" comment.

You will have to essentailly look at two scenarios: Scenario 1 = do nothing; Scenario 2 = refinance. The best way to do this is to set up two amortization schedule spreadsheets showing anything that may be relevant, such as additioanl principle payments you make. A big difference between Scenario 1 & 2 will be the new rate, term, and closing costs that will come into play for a refinance. There are infinite scenarios you can look at when playing around with a spreadsheet and seeing how much you save in interest if you contribute an extra $100 or $1000 per month to your monthly payment. Although I have mentioned using mortgage calculators in previous posts, I highly recommend poeple with good math skills (which is many people in this forum) to do their own math and make their own financial spreadsheets. This way you can cater finance to your own needs.

Jon, I empathize for you and Jenny ... you two have been put in a crappy situation. You can't blame yourself for buying your first place ... you simply happened to be in the wrong place at the wrong time. If we all could predict the markets, we would be very rich people. I hope before you and Jenny consider relocating, that the real estate market in the next 2 years recovers significantly in your area. Already, there have been some signs of improvement. Let's hope it continues.

Posts: 69 | From: USA | Registered: Apr 2002  |  IP: Logged
j0n
resident cyclist (aka - dude w/ the pole)
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Thanks Mark. Since we have a good safety stash in a savings account, I'm throwing a lot of extra money that might otherwise go in the savings account at the mortgage. Paying down a 6.25% debt makes much more sense than earning 1% at the bank even if it's harder to liquefy.

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Ninety percent of the time it doesn't happen, and probably it's just as well it doesn't, though if you can't get a level of candor on sex and you choose to behave instead as if this isn't ever on your mind, the male friendship is incomplete
P. Roth

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Euroskimark3

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The decline of mortgage rates surprises me every day. Rates are hovering around 4% on average for 30-year fixed rate conforming mortgages. For those of you who still might be in the upper 5% range, take a good look at the costs/benefits of refinancing. For those of you who are thinking of becoming first-time homebuyers, it's a win-win situation ... buyers market & low rates. Mortgage/Refinancing fees keep going up every year due to the crappy state Fannie Mae/Freddie Mac is in. With the new Dodd-Frank Act, expect banking in 2012 to become very cumbersome.
Posts: 69 | From: USA | Registered: Apr 2002  |  IP: Logged


 
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