Is a 4.875% interest rate making you think? (Raleigh, Kelly: insurance, lenders)

[geoff2v]

Originally Posted by sls76

The inflation problem will also be a result of the bailouts. Where are they getting that money? My question is wouldn't double digit rates put additional downward pressure on prices? I'm not suggesting that if rates go from 5 to 10 percent house values will fall by 50 percent, but my instinct is that they fall. Am I wrong?

The thought is that once (if!) the deflationary pressure ends and this money that the Fed is flooding the banks with finally gets used, then they'll raise interest rates to ease on the brakes. Frankly, a year or two of > 10% inflation wouldn't be such an awful thing, as it go a long way towards alleviating the problem of owners owing more than their homes are worth. The problem is that it's hard to damp down inflationary pressures once they start.

[sls76]

Originally Posted by geoff2v

The thought is that once (if!) the deflationary pressure ends and this money that the Fed is flooding the banks with finally gets used, then they'll raise interest rates to ease on the brakes. Frankly, a year or two of > 10% inflation wouldn't be such an awful thing, as it go a long way towards alleviating the problem of owners owing more than their homes are worth. The problem is that it's hard to damp down inflationary pressures once they start.

But how does a year or two of double digit inflation lead to home appreciation (I think that's what you're saying when you say it will help alleviate the problem of owners being upside down)? I see a deep recession with possible double digit unemployment (just my opinion, of course). If inflation picks up again and real wages likely do not keep up (because with high unemployment you don't need to give a big raise to keep the talent from leaving), what you can afford to spend on housing shrinks.

[Charlton Dude]

Originally Posted by geoff2v

I didn't know that you could get an arbitrary-length loan -- really? I've never heard of that. Interesting.

I cannot state that all banks will do that, but every one I have worked with has. One bank did it this way. The 15 year rate applied to all loans 15 years or less. The 20 years rate applied to all loans 16 to 20 years. The 30 year rate applied to all loans 21 to 30 years. You could pick the length that fit your needs the best. I think most people see a 30 year rate and assume they need to take the loan for 30 years.

[Charlton Dude]

Originally Posted by North_Raleigh_Guy

My mortgage is with Chase. Would I be better of dealing directly with them or should I consider working with the mortgage broker I used during my purchase?

Mine is with the same lender as you. I went with them for the refi, as costs are much less by staying in house. They have been great. He surprised me today by sending me an email letting me know that he lowered my rate from 5% to 4.75% on his own. Earlier in the day I was mad that I did a final lock, right before they dropped again. I never expected him to honor the lower rate without me even asking. That made my day.

[monkeyboy]

Even though the rates are low right now, I'm super happy I put the brakes on buying a house. Things are just too uncertain right now to make any kind of big commitment like that. Renting is freedom, my company has already had a huge layoff, and is likely to have more in the near future. If I get the bullet, no big deal, just move where the work is...now if I owned a home on the other hand, I'd probably end up in some crappy job to support the home...

[uncletupelo]

we locked on a 4.65 30 year fixed with zero points today thru my longtime broker. we got a 4.85 with zero points on our second home on the coast. both our refi's.

[MammaLakn]

At what point should one consider refinancing? We are nearly 1 year in to our 30 year fixed rate 5.25% mortage.

[sbanawan]

Originally Posted by MammaLakn

At what point should one consider refinancing? We are nearly 1 year in to our 30 year fixed rate 5.25% mortage.

There are some calculators on the net that will help you figure this out. Since you're so early in your mortgage, you're paying mostly interest now so you haven't put a dent in your principal yet so refinancing might make sense. Just make sure that you don't owe more than the house is worth on today's market.

[MikeJaquish]

Originally Posted by MammaLakn

At what point should one consider refinancing? We are nearly 1 year in to our 30 year fixed rate 5.25% mortage.

It isn't a matter of the amount of time you have had your loan, unless you have a prepayment penalty.

Talk to your lender rep, and determine the costs of refinancing.
If the reduced payment makes refinancing worthwhile, i.e., if you recoup the costs within an acceptable length of time and then reap the benefits of the lower payment ongoing, then you should consider proceeding.

[North_Raleigh_Guy]

Man this thread has my wheels spinning. I wonder if this will last till after Christmas. I am slammed this week and leaving town for the holidays in a few days so I can't see me getting the time to meet with lenders or brokers to talk about refi. I know it is just conjecture, but anybody think rates will still be in this zone after christmas? I woulder what the chances are it will be lower. Man this is bringing back memories of all the anxiety I went through trying to make sure I got the best rate back when I purchased in 06'. Oh the Humanity!!!!