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My wife and I are first time home buyers. I have a credit score around 710/690. the mortage will be in my name. Our lease is up in May so we decide to test the market on a house with interest rates being low.
3/8/20. USAA offers us 5.00 on a 30 year conventional with 3.5 down.
ugh.
moving on.
3/18/20. We go to a local lender that is recommended by our realtor. he offers us at 8:30AM a 3.5 interest rate on a 30 year conventional at 3.0 down. (how much we can afford at the moment).
FHA loan is already up to 5.0 at this time.
we start looking for houses with our realtor. our market is incredibly hot. we put an offer down on friday, do not get the house. our realtor mentions that he spoke to the lender and that interest rates are going up. saturday, still no luck on houses. realtor mentions our rates might not be at 3.5 and to check with the lender.
lender lets me know today that he did not lock our 3.5 interest rate on wednesday and instead locks us in at fridays rate (3/22) The rate on friday is at 4.125%. they expect interest rates to go up to 5 all across the board this coming week. and monday is speculated at 4.5
our lender offers us 4.125% for the next 120 days to find a house and close. if the interest rates drop again in that time frame he will let us out of the lock at no cost.
i'll admit, i'm pretty upset at this.
i don't know if we should continue to look or stick to renting. we now have until july to find a home and close. interest rates are going up. will they come back down in june? if COVD-19 continues to scare ppl?
is what the lender offered a fair compensation for not locking in our interest rate? part of it is our fault. we should have followed up with him to lock in on wednesday or thursday.
Good luck, I"m kind of in your shoes. My lease is up in august. The tone I get here is now is always the best time to by for realtors and mortgage guys. Make sure you're working with people who have your best interest in mind and not their's.
I am not sure how how you found someone to lock you in without a property address. The industry standard is for the buyer to have a ratified contract prior to locking.
Rates are artificially high at present. The move caught an entire industry by complete surprise. As the economy gets further down the toilet, the will be a need to get consumers the rates they want so they can buy. But before that can happen, industries must show stability (and therefore, show decent employment numbers) before the Fed can concentrate on the consumer.
I would move cautiously at this point in time. We could possibly be at the top of the market with values facing a slide down. If I were selling I would be consider offers anywhere close to my list price. Agents should brush up on short sales, too. The talk is not are we headed to a recession, but are we headed to a depression? I seriously doubt the latter, but I would not make any serious financial moves until we have a handle on current events. You can't just shut down the economy without any repercussions. Just my opinion. Everyone's situation is different.
I am not sure how how you found someone to lock you in without a property address. The industry standard is for the buyer to have a ratified contract prior to locking.
Rates are artificially high at present. The move caught an entire industry by complete surprise. As the economy gets further down the toilet, the will be a need to get consumers the rates they want so they can buy. But before that can happen, industries must show stability (and therefore, show decent employment numbers) before the Fed can concentrate on the consumer.
I would move cautiously at this point in time. We could possibly be at the top of the market with values facing a slide down. If I were selling I would be consider offers anywhere close to my list price. Agents should brush up on short sales, too. The talk is not are we headed to a recession, but are we headed to a depression? I seriously doubt the latter, but I would not make any serious financial moves until we have a handle on current events. You can't just shut down the economy without any repercussions. Just my opinion. Everyone's situation is different.
I was curious about this, too. I have never heard of locking a rate on a house that hasn't been found yet.
Welcome to the home buying experience. By the time you get your house keys you'll be willing to gouge your eyes out of your socket for a piece of mind. Buying a house with a mortgage is a gut wrenching roller coaster experience especially if you are in a hot RE market. It doesn't help that you are putting down a small down payment. If you were paying 30% down payment, you'll get some cushioning against all the angst/frustrations.
On the flip side, if you buy now given you were planning on it, and your lease is coming up, you have a chance to negotiate the selling price down. People may want to off load and the market is going in pause mode, so buyers may be able to get favorable pricing.
With regards to the interest rate, you can refi. Unless you happen to get something below 3.5 or 3.25 even 6 months ago, you would end up possibly refinancing anyway. So you refi when rates go down.
My 2 uneducated cents as an unqualified nobody
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