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Old 09-25-2008, 06:36 PM
 
14 posts, read 31,673 times
Reputation: 17
Quote:
Originally Posted by SmartMoney View Post
bowlman, when is your closing?

Is it a jumbo FHA or below 417K?

new construction or resale?

the closer your closing, the more inclined to lock......but.....no one has the crystal ball.
My closing is October 31st. It's a loan for $162,000 and it's a resale. I just don't want the bailout to happen, the interest rate will go up and then I'll get hit with a higher rate. I have a cap though that my rate can't go higher than 6 5/8. I know it's tough to predict though.
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Old 09-25-2008, 06:44 PM
 
Location: Chattanooga TN
184 posts, read 434,780 times
Reputation: 121
I am in the same position & worried. Just made an offer on a house & I think I'm going to lock in. Everything just seems unstable. 6.2 seems good enough. I've been reading many estimates that it's only going up. Ahhh!
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Old 09-25-2008, 09:13 PM
 
82 posts, read 211,766 times
Reputation: 14
Quote:
Originally Posted by etta View Post
I am in the same position & worried. Just made an offer on a house & I think I'm going to lock in. Everything just seems unstable. 6.2 seems good enough. I've been reading many estimates that it's only going up. Ahhh!
if there is time you can usually get a float down or they can switch lenders... it's always good to lock
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Old 09-25-2008, 09:23 PM
 
Location: MID ATLANTIC
3,913 posts, read 8,273,934 times
Reputation: 2902
On bowlman23's, he has a capped, worse case scenario, the 6.625%. I hope that is w/ zero points, no origination and no discount? If so, I would float through this. If you locked on today's rate, would you still be at 6.625%? Personally, I think our current market is panic-priced and I disagree with almost everyone out there that says "lock."

That said, the blog I read daily recommends locking loans that are closing in 60 days or less. In fact, here is a direct cut and paste:

If I were considering financing/refinancing a home, I would....
Lock if my closing were taking place within 7 days...
Lock if my closing were taking place between 8 and 20 days...
Lock if my closing were taking place between 21 and 60 days...
Float if my closing were taking place over 60 days from now...
This is only my opinion of what I would do if I was financing a home


As for Etta, I would definitely not lock until you knew if your offer were accepted. Then you have a decision, once it's accepted. I like to use the "sleep at night" rule for all locks. If you are going to be up at night, unable to sleep, worrying about your rates, LOCK. Most people can't buy a good night's sleep. Locking is a cheap price.

If the market moves down significantly, most lenders have a relock policy for rates that have moved down and usually there must be a minimum movement (like 1/2 percent) before the lender will renegotiate. However, on an FHA loan, you can request your appraisal be assigned to a new lender provided you paid for the appraisal. Lock fees paid to any lenders would be lost if you move the loan. FWIW, HUD requires lenders to honor your request to move the loan. But before anyone gets too cocky, make sure the loan is credit approved.

Good luck and keep us posted.
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Old 09-25-2008, 09:33 PM
 
14 posts, read 31,673 times
Reputation: 17
Quote:
Originally Posted by SmartMoney View Post
On bowlman23's, he has a capped, worse case scenario, the 6.625%. I hope that is w/ zero points, no origination and no discount? If so, I would float through this. If you locked on today's rate, would you still be at 6.625%? Personally, I think our current market is panic-priced and I disagree with almost everyone out there that says "lock."

That said, the blog I read daily recommends locking loans that are closing in 60 days or less. In fact, here is a direct cut and paste:

If I were considering financing/refinancing a home, I would....
Lock if my closing were taking place within 7 days...
Lock if my closing were taking place between 8 and 20 days...
Lock if my closing were taking place between 21 and 60 days...
Float if my closing were taking place over 60 days from now...
This is only my opinion of what I would do if I was financing a home


As for Etta, I would definitely not lock until you knew if your offer were accepted. Then you have a decision, once it's accepted. I like to use the "sleep at night" rule for all locks. If you are going to be up at night, unable to sleep, worrying about your rates, LOCK. Most people can't buy a good night's sleep. Locking is a cheap price.

If the market moves down significantly, most lenders have a relock policy for rates that have moved down and usually there must be a minimum movement (like 1/2 percent) before the lender will renegotiate. However, on an FHA loan, you can request your appraisal be assigned to a new lender provided you paid for the appraisal. Lock fees paid to any lenders would be lost if you move the loan. FWIW, HUD requires lenders to honor your request to move the loan. But before anyone gets too cocky, make sure the loan is credit approved.

Good luck and keep us posted.
My rate is with no points. If I were to lock today, I would lock in at 6.375%. However, between now and closing, I am capped at 6.625% meaning that my rate cannot go any higher. I still think it's risky to float through this. It is hard to gauge though.

I'm really torn, but my instinct tells me to lock. This will be my fiancee's and I's first home and we will more than likely only be in there for 5-7 years. If I go down an 1/8 of a point, I don't think it'll make that big of a dent in my payment. I'm still open to all opinions though.

This forum is great.
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Old 09-26-2008, 06:15 PM
 
Location: Plano, Texas
1,672 posts, read 4,343,410 times
Reputation: 640
I disagree with many of the earlier posters. I believe that once this bill passes rates will drop. I have several reasons why i believe this:
1. Interest rates are set by investors by their purchases of mortgage backed securities. When this bill passes, it will give investors confidence in buying the mbs. As demand goes up, price of the mbs goes up and the yield drops, which means interest rates drop.
2. Interest rates follow inflation as inflation eats away at the fixed return of your mortgage. All recent economic reports are showing that inflation is moderating. Also, unemployment is up, which means companies do not have to pay people more money to hire them or keep them. this is know as wage based inflation, since unemployment is up, wage based inflation is under control.
3. Interest rates tend to fall when our economy is not doing well, and our economy is not doing very well right now.
4. The government is encouraging investors to buy mbs to help drive rates lower. the gov't is doing this as low rates should help the real estate market get back on track. More people are apt to buy when rates are low. This was especially obvious with the govt bailout of fannie mae and freddie mac.

With all that being said, it is much better to lock a rate when you should have floated, then it is to have floated your rate when you should have locked. If you are comfortable with the rate and payment and your instincts are telling you to lock, you might want to lock. I could very well be wrong and once this bill passes rates could go up. However, in my opinion we will see interest rates in the low 5's inside the next month or so.
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Old 09-26-2008, 08:34 PM
 
82 posts, read 211,766 times
Reputation: 14
Quote:
Originally Posted by bowlman23 View Post
My rate is with no points. If I were to lock today, I would lock in at 6.375%. However, between now and closing, I am capped at 6.625% meaning that my rate cannot go any higher. I still think it's risky to float through this. It is hard to gauge though.

I'm really torn, but my instinct tells me to lock. This will be my fiancee's and I's first home and we will more than likely only be in there for 5-7 years. If I go down an 1/8 of a point, I don't think it'll make that big of a dent in my payment. I'm still open to all opinions though.

This forum is great.
you can lock and float down if there is time and the new rate is .25% less usually. There is something called pull through that means that you have to have a certain percentage of locked loans that are funded. don't worry too much but make sure your guy or gal can float you down if the rates go down a lot...
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Old 09-26-2008, 08:44 PM
 
Location: MID ATLANTIC
3,913 posts, read 8,273,934 times
Reputation: 2902
You answered your own question......lock. You won't sleep until you do. In the end, it doesn't matter what any of us would do, we aren't paying your mortgage. You can refinance after closing if rates really go down in the next year.....if there is a hard drop prior to closing, you can move the loan if your lender won't work with you.

Get some sleep.
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Old 09-26-2008, 09:56 PM
 
1,415 posts, read 2,710,807 times
Reputation: 810
I think bail out will drive of rates, because of the cost of the bail out. Inflation will go up as the value of the dollar will go down. Rates have been steady all week waiting to see what will happen. I locked today a VA loan at 6.0.

I will have a good sleep tonight.
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Old 09-27-2008, 05:33 AM
 
14 posts, read 31,673 times
Reputation: 17
I did lock in my rate. I hope I wasn't wrong in doing so, but at least now I know what it is.
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