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Started By
Message
How far down will mortgage rates get?
Posted on 12/16/08 at 12:18 pm
Posted on 12/16/08 at 12:18 pm
I see all the talk about cutting the fed funds rate to 0.5%, but can't find anyone who's analyzed the practical implications.
Specifically, are we going to start seeing sub-5% rates soon? I ask because it seems like everyone I know has a mortgage rate in the low to mid 6% range. So anything under 5% would get close to the threshhold under which it'd be wise to re-fi. Are we going to get to that rate in the next few months?
Specifically, are we going to start seeing sub-5% rates soon? I ask because it seems like everyone I know has a mortgage rate in the low to mid 6% range. So anything under 5% would get close to the threshhold under which it'd be wise to re-fi. Are we going to get to that rate in the next few months?
2
Posted on 12/16/08 at 12:23 pm to Martin Blank
There really isn't any direct corrrelation between the fed rate and mortgage rates. The 10 yr treasuries area better indicator.
Posted on 12/16/08 at 12:31 pm to Martavius
Wow. That's almost a mirror image. Thanks.
So does this metric follow any type of rule? By my untrained eye, it looks like you take the 10 year Treasury and add 1.5% to 2% to get your 30 year fixed. Am I reading that right?
And if so, what kind of Treasury rates are we looking at in the next few months?
So does this metric follow any type of rule? By my untrained eye, it looks like you take the 10 year Treasury and add 1.5% to 2% to get your 30 year fixed. Am I reading that right?
And if so, what kind of Treasury rates are we looking at in the next few months?
Posted on 12/16/08 at 12:36 pm to Martin Blank
I couldn't tell you what treasuries are going to do. That chart only goes through January 08 and the gap was above 2% at that time. It's probably even more now.
Posted on 12/16/08 at 4:24 pm to Martin Blank
it'll be possible to get them in the 4% range, but it won't be easy to qualify.
Posted on 12/16/08 at 4:31 pm to Colonel Hapablap
i bet these idiots will encourage lending to less than ideal borrowers again. in fact, i'd bet anything on it.
Posted on 12/16/08 at 4:36 pm to Colonel Hapablap
Possibly into the 4% range implies probably not, at least to a cynic like me. If it doesn't go under 5%, how close to 5.0% do you think it's LIKELY to go? I'd consider a re-fi if I could shave a full point off my current 30 yr fixed.
Posted on 12/16/08 at 4:40 pm to Martin Blank
FWIW, the bank I have my mortgage through in Lafayette is currently offering 30 yr fixed at 5.125% and 4.750% with 1% origination fee. I, like you, am looking into refinancing at these lower rates (currently have a 30 yr fixed at 6.625%).
Posted on 12/16/08 at 4:45 pm to TygerB8
With the way the Government is treating them, they should be treated as "Risk Free" investments. Thus, they should be pretty close to equal to the yield on long term Gov't bonds.
Posted on 12/16/08 at 5:00 pm to simonizer
um no. Lenders are getting ALOT tighter.
Posted on 12/16/08 at 5:01 pm to BlackHelicopterPilot
quote:
With the way the Government is treating them, they should be treated as "Risk Free" investments. Thus, they should be pretty close to equal to the yield on long term Gov't bonds.
I think they are treating the larger secondary institutions who buy bundles of mortgages that are incorrectly rated by rated agencies as "risk free" - your local bank and credit union sells them in bulk so it really isn't that risky for them.
I don't expect the rates to drop a whole .75%, unless you have a big down payment (financial institutions dont want to risk having upside down loans).
This post was edited on 12/16/08 at 5:03 pm
Posted on 12/16/08 at 5:18 pm to TygerB8
I'm also in LFT. Which bank?
Posted on 12/16/08 at 5:22 pm to Martin Blank
Home Bank
Posted on 12/16/08 at 9:15 pm to TygerB8
usaa.com
^ offering some GREAT %'s right now...
4.125
but you have to be a veteran to qualify
^ offering some GREAT %'s right now...
4.125
but you have to be a veteran to qualify
Posted on 12/17/08 at 6:25 am to SnowMan77
quote:
I think they are treating the larger secondary institutions who buy bundles of mortgages that are incorrectly rated by rated agencies as "risk free"
Given virtually the entire active mortgage market is fannie/freddie/fha sponsored... it is risk free as the govt has shown they implicit guarantee is explicit when needed.
Where the credit agencies were ridiculous was the non Fannie Freddie MBS', but there are very few new loans being issued like those now.
quote:
I don't expect the rates to drop a whole .75%, unless you have a big down payment (financial institutions dont want to risk having upside down loans).
They will drop atleast that, and not because of the fed rate but the massive purchases the fed will make.... Fannie and Freddie will still guarantee 95% loans.
Posted on 12/17/08 at 9:53 am to TheDoc
quote:An officer veteran.
but you have to be a veteran to qualify
Posted on 12/17/08 at 10:44 am to NC_Tigah
I am seeing sub 5 on a 30 yr fixed right now
Posted on 12/17/08 at 10:53 am to igoringa
4.375% on a 30 yr from a lender at Hancock Bank.
Posted on 12/17/08 at 11:06 am to sug314
quote:
4.375% on a 30 yr from a lender at Hancock Bank.
Who do I call there for that?
Posted on 12/17/08 at 11:08 am to sug314
Is that with no origination and no points?
I've got 4.625% for 30 yr (no orig, no pts) with my bank right now.
I'm at 6.625% with my loan right now and am ready to pull the trigger today.
I've got 4.625% for 30 yr (no orig, no pts) with my bank right now.
I'm at 6.625% with my loan right now and am ready to pull the trigger today.
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