Home mortgage rates....

T

TheFied

2,500+ Posts
I called up our mortgage broker about refinancing our 30 year 6 3/8% mortgage into a 15 year mortgage. Our broker said he could lock us in at 5 1/4% today for a 15 year note; we have enough equity in our house to do this as well. We would like to do this to get a lower interest rate and we are currently paying off our loan at a rate of ~20 year plan.

The plus/minus of doing this in 30 year vs. 15 year aside; I am not interested in that debate at this time.

What I'm wondering is what do you guys think that the rates might do over the next few weeks. I think I heard they were 4 7/8% for a 15 year note recently but for a short time.

We are in no hurry to refinance so we could afford to wait if we wanted to.
 
I'm in the industry (title side anyway) and follow this stuff pretty closely so...

the market has already priced in a 50 basis points drop so I don't think that's going to help too terribly much.

5 & 1/4 on a 15 year mortgage is a fair rate- provided you are not paying any origination fee to the broker. If you are paying 1 percent plus that rate I don't think you are getting good value.

Another question- how long do you plan on being in your house? If not for 80 something months I'd be hesitant to add anything to my balance (iow I wouldn't roll anything into my closing costs).

If you want to do anyhting more personal please don't hesitate to PM me and I'd give you those thoughts as to different scenarios you should look for. A lot of it depends on loan amounts and the like, so hard to say.

I don't think rates are going up anytime soon, but I think they might have gotten as low as they were ever going to get again last Wednesday at about noon... I'd want to wait, on a 15 year mortgage, down to 5.00 flat probably if I was really looking for a bottom.

Like I said, feel free to pm me if you want any specifics.
 
We would be paying for the closing costs ($2800-3000) in cash. This rate is with no origination fee (or discount fee or whatever they call it).

Like I said, we are in no hurry to do this refinance but 5 1/4% sounds pretty damn good. 1 1/8% better than what we are currently at plus we wanted to restructure it to a 15 year note.

I just didn't know if we might see this rate change either way soon.
 
Check Penfed.org for incredibly low closing costs. They are waiving most costs for new members. To become a member you need to join some organization that supports military families. (35$ I think).

As far as rates, I'm not a pro, but I watch this stuff pretty closely. I think history will repeat itself. The lowest rates I've ever seen on bankrate.com were in June 2003,(4.5ish for 15 years) and I think that cycle will repeat itself. I think this summer, while the housing credit crunch is still going
strong and most people have already refinanced, rates will dip down to what they were in '03.
 
5 & 1/4 for a 15 year note- no origination and 2800 in closing costs sounds like a pretty fair deal. If you shopped it a bit you might be able to get an 1/8 lower- but if you trust your guy I'd definately just advise taking that- your guy sounds like he's treating you pretty good- and if you've used him before you know he will deliver for you etc.

As to whether rates get lower- who knows. I'd guess you might be able to see another loss of up to half a point- but I don't understand what's going on right now. The 10 year yield is at 3.70 right now, which is just about exactly where it was last week before it jumped down to 3.36- If you would have locked then you could have gotten 4.75% easy on a 15 year mortgage.

Those times could come back, but then again so could where we were at 1 month ago. It's really hard to call a bottom w/o using hindsight. I might wait to see what the fed does today, how the bond market reacts, and then lock in a couple days.

Also- this is very important- If you know you are refinancing but don't know when get all your stuff together, get your house appraised before you are ready to lock (maybe even get a title committment).

If you are able to close within 12 days you can often times get a slightly better interst rate (or your broker can get paid more anyway- which means maybe you cna talk him into helping pay for some of your costs for closing- you have to be prepared ahead of time to take advantage of this though.).
 
As far as where the Fed is heading, which may or may not track with mortgage rates, I work with a dude who was recently an analyst for the Fed.

I was quizzing him for the same reason; I need to refi within the next 6 months.

He said that the next regularly scheduled meeting after today is March ish (I forgot exactly what date he said) and that there will be only one major data release, employment, between now and then that might impact what they do beyond the volatility of the market in general.

He said he expected a drop today (who doesn’t). He guessed that the Fed would either leave the rate the same or possibly drop it again at the next meeting based on employment data. He felt if the jobs number is shocking, they may drop again. Otherwise, he thought they would leave it the same.

I wondered if they would start ticking the rate back up pretty quickly to attack inflation fears. He said they wouldn’t do so to wait and see if the recent moves are having the desired effect. He also said they’d never reverse so quickly for fear of looking inept.

In short, he said we are probably in good shape until early summer before they move the rates back up. But like any good economist, he ended by saying anything could happen.
 
you think 30 years have high total payment, you should see some of the 40 and even 50 year notes some of the subprime lenders were beginning to sell last year. i doubt they are available any longer, but damn it was a lot of interest.

anyway, not sure about the size of your mortgage, LTV, anything like that so without that knowledge its hard to determine exactly how good of a deal that price is, or if its worth shopping for an eigth or quarter lower.
 
I feel like a gambler.... do I take the 5.25% 15-year now or wait to see how things shake up? I don't need to refinance but would like a better rate than my 6.375% 30-year note as well as restructure it to 15 year....
 
You'll feel silly if this is the bottom and you don't take advantage of it. How much lower than 5.25% do you really think rates are gonna go?
 
Locked in this morning at 5.125% 15 year with no origination fees. We get 1 free float-down in case rates drop again before we close.
 
"We get 1 free float-down in case rates drop again before we close."

I think I have a good guess by inference, but have never heard of this. What is this?
 
Surely it means he can adjust his rate one time, without penalty, presumably within a certain time period before close.
 
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