How will this affect the mortgage rates in your opinion? (property, equity)

[MikeyKid]

Originally Posted by VictorBurek

I agree, the economy is getting worse but is it going to get bad enough to drive rates down as far as you think. I dont know and you dont know... all we can do is guess. But a bird in hand is worth 2 in the bush. Everyone should consider refinancing now and take the bird in hand and not risk rates rising cause when they start to rise they will rise quickly.

Additionally, as the economy gets worse less and less people will be able to qualify for a refinance. If people wait to refinance, they might lose their job and then not be able to refinance when rates go lower.

OK - seriously... "Rise quickly?!" wow People can't get financing now.

The rates are not done in some exotic location away from prying eyes... they don't have secret handshakes and perform a ceremony where upon completion the new rates are written in blood. The Fed has many meetings on these things (they're currently meeting in Jackson Hole) and there's extensive debate and info released - most notably so the "markets can prepare themselves". Do some google searches.

If you don't want to believe any of that, fine - just look at what comes out of Goldman Sachs recent releases (the sparkle in the eye of all finance people)... Look at what they're saying now.

We are leveraged to the hilt right now - more then half the world is... look at Greece, Iceland, Europe, Russia, China, et al. Raising rates would cripple the economy, raising them quickly would practically destroy it.

If all else fails to convince you, know this... the administration will do nothing to risk making things worse before the mid term elections. That means definitely no increases until November at a minimum. In fact, to save themselves face and make things seem better, they'll lower them between now and then. Wanna bet on it?

[mortimer]

Originally Posted by VictorBurek

... would be is it likely that they will go lower.

No one knows whether it is likely or not.
Making a bet one way or another is just gambling.

Originally Posted by VictorBurek

... The only reason rates were so low in Japan is deflation.
We do not have deflation here nor do we have inflation.
The only way rates go lower is if the economy worsens further.

The rates went down from around 5% to around 4% without
deflation already. They went down because people are
running to the safety of holding bonds. Money is flowing
out of the stock market and into the bond market.

That is what is making the rates go low. Inflation or deflation
are only a peripheral influence. If the stock market continues
to tank, more people will go into bonds and rates will go lower.

If there are more layoffs and initial unemployment claims continue
to rise, more people will go into bonds and rates will go lower.

The government/media calls this the Great Recession.
If this were 1928 or so, it would be referred to as a depression.
That is what it is ( A rose is a rose ... ) -- a depression.
We are still in denial of that fact.

Again, what you or I think/believe is going to happen is irrelevant.

I believe it's going to get worse. Of course, see the above for
what I believe. I'm still investing according to what I believe.

[VictorBurek]

Originally Posted by MikeyKid

OK - seriously... "Rise quickly?!" wow People can't get financing now.

The rates are not done in some exotic location away from prying eyes... they don't have secret handshakes and perform a ceremony where upon completion the new rates are written in blood. The Fed has many meetings on these things (they're currently meeting in Jackson Hole) and there's extensive debate and info released - most notably so the "markets can prepare themselves". Do some google searches.

If you don't want to believe any of that, fine - just look at what comes out of Goldman Sachs recent releases (the sparkle in the eye of all finance people)... Look at what they're saying now.

We are leveraged to the hilt right now - more then half the world is... look at Greece, Iceland, Europe, Russia, China, et al. Raising rates would cripple the economy, raising them quickly would practically destroy it.

If all else fails to convince you, know this... the administration will do nothing to risk making things worse before the mid term elections. That means definitely no increases until November at a minimum. In fact, to save themselves face and make things seem better, they'll lower them between now and then. Wanna bet on it?

I am doing plenty of loans, so some people can get financing now... but it is much tougher.

Not sure what the rest of your post is about. What are you trying to convince me? I am just saying it is not a certainty that mortgage rates go lower. As far as no increases until Nov. i think you are referring to the Fed fund rate.. That rate will not move higher until late 2011 at the earliest in my opinion. But mortgage rates can rise even if the Fed holds the Fed Fund rate at the current level.

Also, not trying to fight or argue. You seem to have a understanding of the markets and hopefully i will learn something from you.

[sharpie1234]

So, today i refinanced my 5.25% 30 year and switched to a 4% 15 year loan.
this will save me about 3700 in the first year (loan amount 323k) and the refi, in total (no points, title fees, lender fees, all other costs) cost about 2900.

so i will be recouping my costs within 9 or 10 months. everything after that will be profit.

i hope the rates don't go lower significantly, otherwise i will be pulling my hair out! hah!

[VictorBurek]

I think you made the right call. That is a fantastic rate, congrats!

[MikeyKid]

Originally Posted by VictorBurek

I am doing plenty of loans, so some people can get financing now... but it is much tougher.

Not sure what the rest of your post is about. What are you trying to convince me? I am just saying it is not a certainty that mortgage rates go lower. As far as no increases until Nov. i think you are referring to the Fed fund rate.. That rate will not move higher until late 2011 at the earliest in my opinion. But mortgage rates can rise even if the Fed holds the Fed Fund rate at the current level.

Also, not trying to fight or argue. You seem to have a understanding of the markets and hopefully i will learn something from you.

Out of curiosity, are most of the loans FHA? and yeah, I was trying to convince you. lol

I agree that rates could rise without the Fed doing anything, but I suspect that since most mortgages being written these days are FHA - the rate won't go up. They have to turn around the housing numbers going into the elections - it doesn't leave them much time.

[VictorBurek]

I do about 50/50 right now between govy loans and conventional.

I do agree that rates are very unlikely to rise in the near term, I am just not so certain if rates can go lower from here. And with rates already at the lowest level ever, i find it difficult to not advise people to refi now and not hold out for lower rates.

[MikeyKid]

Originally Posted by VictorBurek

I do about 50/50 right now between govy loans and conventional.

I do agree that rates are very unlikely to rise in the near term, I am just not so certain if rates can go lower from here. And with rates already at the lowest level ever, i find it difficult to not advise people to refi now and not hold out for lower rates.

Refi?! - abso*fin*lutely... With you there. My context was in relation to new mortgages and that the consumer shouldn't feel pressured to buy if they're on the fence for fear of rates shooting up.

[mortimer]

Originally Posted by sharpie1234

... refinanced my 5.25% ... to a 4% ...
i hope the rates don't go lower significantly,
otherwise i will be pulling my hair out! hah!

Why would you do that?

It's like buying a stock for $10 - selling it for $15 a year
later and then getting mad when it later goes to $20.

You got a good deal and should be happy with that.

If rates go "significantly" lower then you would just refinance again.
Many of the posts in this thread are from people who say that rates
won't go much lower, but most of those people have admitted that
the rates can go lower - even to 2%. Don't discount that possibility.

The fact is that the Federal Reserve would like to see some more
inflation so that the housing market will stabilize and businesses can
have more pricing power and people can start seeing some nominal
wage gains. Even if inflation was 7%, if people get 4% raises, they
"feel" better since most people couldn't do math to save their lives.
I think the recent housing bubble is evidence of that.

[Flat2MT]

Originally Posted by sharpie1234

So, today i refinanced my 5.25% 30 year and switched to a 4% 15 year loan.
this will save me about 3700 in the first year (loan amount 323k) and the refi, in total (no points, title fees, lender fees, all other costs) cost about 2900.

so i will be recouping my costs within 9 or 10 months. everything after that will be profit.

i hope the rates don't go lower significantly, otherwise i will be pulling my hair out! hah!

Sure, as long as the value of you home doesn't decline....and they increase your property taxes....