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Old 08-28-2018, 11:12 AM
 
Location: Northwest Arkansas
573 posts, read 446,399 times
Reputation: 1293

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Had an agent call me up today because he sees I have been looking at houses listed on their website daily for the last three years, which I have. Guy tells me that rates are skyrocketing right now, and that the longer I wait to buy, the higher rates will get. I am obviously nervous as rates are way higher than this time a few years ago, but we also don't want to rush into something that will be hard to afford. He also told us conventional loans are now 10% down-payment minimum, I always thought it was 5%, has this changed? I remember reading FHA is 3.5%, and RD should be free, but would force us into a less ideal property.

Anyway my fiancee is the sole income at the moment while I am finishing college, and she makes just north of 50k. We are trying for houses that are 160k or less, but I know we will be forced to pay PMI. Should we just wait another year until I am out of college, or is it true that we need to buy now before prices get any higher? I should also mention we only prefer 30 year fixed since we need the mortgage payment to be under 1k a month. Thanks!
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Old 08-28-2018, 11:27 AM
 
Location: Austin
7,205 posts, read 18,973,975 times
Reputation: 9813
There are all types of conventional loans. Nothing about many of the loans are "conventional" beyond the fact that they aren't government loans. There are 3% down, 5% down, etc... They are all credit score driven and ratio driven.

You looking for 3 years and now concerned as rates go up, you're 2 years too late. Rates started going up 2 years ago. This year, they've gone up almost 1% year to date for many programs, and even more than that for other programs with less money down and lower credit scores. I've seen buyers getting 5.75% when they could have gotten 4.25% a couple of years ago.

You can't live your life on woulda, coulda, shouda. You need to decide when the right time to buy for you is, and then buy at that time. Prices might be $200k for what you're looking for instead of $160k, but no one can control that. If you've been looking for 3 years, you've already noticed that a $160k house is not the same house as 3 years ago...
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Old 08-29-2018, 06:46 AM
 
Location: MID ATLANTIC
8,152 posts, read 20,030,108 times
Reputation: 9391
Do not let someone use scare tactics to push you into buying. World's worse reason. Yes, rates are higher than where they were one year ago, but they are still considered historically low. And this is when most salaries are at their highest. The beating of the rates gonna go up drum started beating loud in 2008, hit their loudest in 2010 -2012, and still kept up until 2017.

You were clocked as spending time on this guy's site. I bet you had to give up your contact info just to get an answer to a question. I personally do not think that's the best way to find someone to help you buy a home. Do yourself a favor, if you are not ready, opt out of further contact. You did say you weren't ready, right? But this is a good time to casually ask around about good agents and lenders. If they hound you with similar tactics, cut them loose. There will always be a better rate than what you will pay, and a lower sales price. Neither matters if you are not ready. Situations when you move up your time clock include when family decides to give up their home, gifting you equity. In other words, a once in a lifetime opportunity is the only time you move when not ready, and even then, it still may not be the right time for you.

The 10% down BS on conventional loans is BS and a signal not to even consider this guy. He's a consumer predatorealtor. 3% down has never been stronger. PMI rates continue to improve as rates go up, as home prices tend to do, as well.

Your time and attention would be better served concentrating on improving credit scores and minimizing debt. Be cautious about additional debt. Both of you are at the very dangerous age to acquire debt, with the thinking being it will be paid off with the new job.

Listen to your gut.
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Old 08-30-2018, 09:34 AM
 
4,963 posts, read 12,553,577 times
Reputation: 3762
Quote:
Originally Posted by Loveswater_outdoors View Post
Had an agent call me up today because he sees I have been looking at houses listed on their website daily for the last three years, which I have. Guy tells me that rates are skyrocketing right now, and that the longer I wait to buy, the higher rates will get. I am obviously nervous as rates are way higher than this time a few years ago, but we also don't want to rush into something that will be hard to afford. He also told us conventional loans are now 10% down-payment minimum, I always thought it was 5%, has this changed? I remember reading FHA is 3.5%, and RD should be free, but would force us into a less ideal property.

Anyway my fiancee is the sole income at the moment while I am finishing college, and she makes just north of 50k. We are trying for houses that are 160k or less, but I know we will be forced to pay PMI. Should we just wait another year until I am out of college, or is it true that we need to buy now before prices get any higher? I should also mention we only prefer 30 year fixed since we need the mortgage payment to be under 1k a month. Thanks!
Here's a little nugget for you to chew on....30 year fixed rate mortgage rates have not gone up in 8 months. Rates today are basically the exact same as they were on January 30th. There were a few small peaks and valleys between then and now, but overall rates have been flat. If you took a poll on street corner and asked 100 people if mortgage interest rates have gone up, gone down or stayed flat in the last 8 months, I would venture to guess that 90 of them would say they have gone up.

When you 30 year rate starts with a 4, things are pretty good in my book.
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Old 08-30-2018, 09:48 AM
 
Location: Austin
7,205 posts, read 18,973,975 times
Reputation: 9813
Quote:
Originally Posted by TimtheGuy View Post
Here's a little nugget for you to chew on....30 year fixed rate mortgage rates have not gone up in 8 months. Rates today are basically the exact same as they were on January 30th. There were a few small peaks and valleys between then and now, but overall rates have been flat. If you took a poll on street corner and asked 100 people if mortgage interest rates have gone up, gone down or stayed flat in the last 8 months, I would venture to guess that 90 of them would say they have gone up.

When you 30 year rate starts with a 4, things are pretty good in my book.
This is not true. Rates have gone up considerably this year. Rates were in the 3's, around 3.875%. now they are around 4.25% for a basic conventional loan. FHA rates are mostly 4.75-5.5% on the pre-approval letters I'm seeing. Those are huge swings.

You cannot say rates haven't gone up when they have. Even VA rates have gone up to over 5% on some of the pre-approvals I'm seeing on my listings. Maybe your rate is the same with 20% down when it used to be that same rate at 5% down and that's what you're trying to compare, but you're not saying what the comparing factor is.
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Old 08-30-2018, 10:28 AM
 
4,963 posts, read 12,553,577 times
Reputation: 3762
Quote:
Originally Posted by FalconheadWest View Post
This is not true. Rates have gone up considerably this year. Rates were in the 3's, around 3.875%. now they are around 4.25% for a basic conventional loan. FHA rates are mostly 4.75-5.5% on the pre-approval letters I'm seeing. Those are huge swings.

You cannot say rates haven't gone up when they have. Even VA rates have gone up to over 5% on some of the pre-approvals I'm seeing on my listings. Maybe your rate is the same with 20% down when it used to be that same rate at 5% down and that's what you're trying to compare, but you're not saying what the comparing factor is.
Rates did go up about 3/8ths% during the month of January. Your own example is 3/8ths. To you and the media, I guess that might be a "considerable amount" or a "huge swing". To me and/or people that work in banks/finance....not so much. It always sucks for the person who is almost ready to lock and by the time they can rates are up 3/8ths. But in the grand scheme....no big deal.

I site from 01/30/18 to now. That is 8 months and long term mortgage rates have been flat during that time period.

I haven't done govie loans since the meltdown, so certainly have not been following those. However, I just printed a rate sheet from a wholesale lender I use and if I were doing a $200k FHA/VA loan today, I would be quoting it in the 4.25% range. That would be with $0 origination fee. Rate would be more like 4.0% if the borrower were paying a point. This is not some online, lowball bait/switch rate. This is through a large national bank.

Those rates you see on pre-approval letters are most likely just example rates. Have you seen anyone close with a 5.5% FHA/VA rate??
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Old 08-30-2018, 12:25 PM
 
4,963 posts, read 12,553,577 times
Reputation: 3762
and note what the OP says the agent told him...."rates are skyrocketing right now". That's a load of crap.

Last summer I had an agent tell some borrowers of mine that they had better drop the price of their current home or they would be priced out of building the following year due to increasing interest rates. I let the borrowers know that that was a ridiculous statement. I told them that odds were pretty good that interest rates would be higher next year (2018), but in no way were they in jeopardy of being priced out of building their dream home.

They canned that agent. Relisted in the spring (2018). Sold their home for more money than they were listed at the prior year and proceeded to build their dream home. Their interest rate did end up being about 1/2% higher than it would have been the year prior and they were totally fine with that. Much of that was offset by the extra $20k they netted from their sale. How would the prior agent know if they would or would not be "priced out" of qualifying to build a new home a year down the road?? These folks could have gone on with their build if rates were at 12%.

Last edited by TimtheGuy; 08-30-2018 at 01:08 PM..
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Old 08-30-2018, 10:25 PM
 
Location: Kansas City North
4,836 posts, read 8,254,704 times
Reputation: 8144
I’m the girl who had a 12% adjustable back in 1984. Today’s rates are cheap.
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Old 08-31-2018, 02:02 AM
 
Location: Cary, NC
36,203 posts, read 63,032,284 times
Reputation: 35922
Quote:
Originally Posted by Loveswater_outdoors View Post
Had an agent call me up today because he sees I have been looking at houses listed on their website daily for the last three years, which I have. Guy tells me that rates are skyrocketing right now, and that the longer I wait to buy, the higher rates will get. I am obviously nervous as rates are way higher than this time a few years ago, but we also don't want to rush into something that will be hard to afford. He also told us conventional loans are now 10% down-payment minimum, I always thought it was 5%, has this changed? I remember reading FHA is 3.5%, and RD should be free, but would force us into a less ideal property.

Anyway my fiancee is the sole income at the moment while I am finishing college, and she makes just north of 50k. We are trying for houses that are 160k or less, but I know we will be forced to pay PMI. Should we just wait another year until I am out of college, or is it true that we need to buy now before prices get any higher? I should also mention we only prefer 30 year fixed since we need the mortgage payment to be under 1k a month. Thanks!

Find another agent.
This one is on a sales script and really has little interest in your well-being.
He needs a sale more than you need a purchase.

It is NOT a legitimate role of a fiduciary to spur your urgency, to "get you off the fence," when you have expressed no urgency.
And, you want a fiduciary working for you in a consultative role, not a desperate salesperson.

Rates are NOT skyrocketing. That is a line of crap.
"Boring is Good":
Mortgage Rates: If You Like Boring, You're in Luck!
More fun reading:
30 Year Mortgage Interest Rate Forecast


If you are a year out from some additional financial stability and income, waiting another year may well be a very good thing.

Last edited by MikeJaquish; 08-31-2018 at 02:51 AM..
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Old 08-31-2018, 05:48 PM
 
Location: Northwest Arkansas
573 posts, read 446,399 times
Reputation: 1293
I appreciate the responses. He felt like a "cowboy" if you will, bragging about doing over 4 million this summer in the 150k range, and that he would "Be able to pull any strings" to get us out of our lease and into a home. Also him being one year out of college and acting so knowledgeable was concerning.

We have had verbal fights quite often over my frustration about her not buying two years ago when rates were glorious, and that combined with the area means we are never going to see the deals we could have had then in the future. But the past is the past, can't change it, and I understand her not wanting to be the sole earner responsible for a mortgage in her first year on the job. At this point, unless you guys think rates will get to 5.5-6% in the next year and a half, I might just prefer to finish college and get a job then if we combine over 100k, maybe we can find something nicer in the 190-210k range.

Last edited by Loveswater_outdoors; 08-31-2018 at 05:49 PM.. Reason: Spacing
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