Interest rate dropped, we locked in at higher rate (insurance, mortgage)

[86Sebring]

I need to vent. We locked in our interest rate at 6,1 percent a few weeks ago. Even though we wanted to get the floating option, that would let us wait until closing to get the best interest rate, our Mortgage officer recommended not to pay $500 extra for it, since he thought it was a waste of money. We trusted him, now the rate has dropped to 5,8 and we will close this Friday. SOB, I am pissed
Of course, we can make a adjustment, but only after we make the first payment and that will cost us close to 2k again.
I know, its only a quarter percent, knowbody can predict the interest rates, its like the stock market, blablabla
You just gotta go with your instinct sometime and not trust so-called experts

[wileynj]

Originally Posted by 86Sebring

I need to vent. We locked in our interest rate at 6,1 percent a few weeks ago. Even though we wanted to get the floating option, that would let us wait until closing to get the best interest rate, our Mortgage officer recommended not to pay $500 extra for it, since he thought it was a waste of money. We trusted him, now the rate has dropped to 5,8 and we will close this Friday. SOB, I am pissed
Of course, we can make a adjustment, but only after we make the first payment and that will cost us close to 2k again.
I know, its only a quarter percent, knowbody can predict the interest rates, its like the stock market, blablabla
You just gotta go with your instinct sometime and not trust so-called experts

Your mortgage guy gave you good advice. If you paid $500 for the float option..it's only good if the rate drops more than 1/4 and with that they then add another 1/8th so you would have ended up at 5.925...what's that $5.00/month? So you really didn't get hurt.

[86Sebring]

Originally Posted by wileynj

Your mortgage guy gave you good advice. If you paid $500 for the float option..it's only good if the rate drops more than 1/4 and with that they then add another 1/8th so you would have ended up at 5.925...what's that $5.00/month? So you really didn't get hurt.

Wrong, Wiley
the rated did drop a 1/4% since we locked in The monthly payment at 6.18 is $1833, versus $1774 at 5,875, a difference of $59 times 360 equals $ 21240
It migth not be a lot for you, but is quite a bit of money for me

[wileynj]

Originally Posted by 86Sebring

Wrong, Wiley
the rated did drop a 1/4% since we locked in The monthly payment at 6.18 is $1833, versus $1774 at 5,875, a difference of $59 times 360 equals $ 21240
It migth not be a lot for you, but is quite a bit of money for me

Easy now..why so hostile! I wasn't being a smart arse..I was just saying it's not like you would have received the 5.88 because they add another 1/8 to the drop so you would have ended up with 6 vs 6.18. I know every penny counts these days but what does that equate to? I was just trying to make you feel a wee bit better so that you could relax and enjoy your new home without feeling like you could have done better. Either way... congrats on your new purchase.

[Lusitan]

It's frustrating when stuff like that happens, but as you said, no one can predict this stuff with certainty. You could have just as easily wasted $500 (and your mortgage guy could have just said yeah sure pay the 500 bucks).

Congrats on your soon-to-be new home. Try not to sweat the small stuff.

[JohnVeenstra]

$21,280 "sounds" like a lot of money. It is $708 a year. While everyone wants the absolute lowest rate, sometimes you hit it and sometimes you do not. The rate now is 5.25%. So, did you miss by .125% or .25% or?? As you describe the situation, you were treated properly and very well as long as it was described properly to you up front. The stock market experts hit the absolute high and absolute low point in the market hardly ever. If they could, they would be much wealthier. If you refinance a $300,000 mortgage at 5.25% and it is presently 6.18%, you save about $122 a month after adding costs and prepaids on top of the $300,000 so you pay nothing out of pocket, which you can do assuming the purchase price was at least $387,500 so the new mortgage is at least 80% of purchase price or less and private mortgage insurance is not needed. You break even in 27 months for the costs and pay $122 a month less than now which is savings of $1,464 a year or $43,920 for 30 years.

[86Sebring]

We closed today. yeeeaaahhh, it was a bit nervewrecking the last few days, but its done now. We did get a good deal on the house and are looking very much forward to living in our new Home.
So, we'll enjoy the house and when the time comes, we'll re-adjust the mortgage.

[Gessa]

I closed Monday 2 weeks ago i.e. not this monday at 6.5% - so guess how I feel!!

[monack]

Hey. You guys mortgages and you closed. We lost our financing. Guess how I feel!

[JC JC Mom]

Sorry Monack :-(

Congrats Gessa and Sabring: We just bought our house this summer and i still wake up happy that its mine :-)

Initially we were looking to buy last year but with the rates at that time 6.7 we decided to wait until this year to buy and we ended up being lucky... so it all depends... I hope everything works out and enjoy