Mortgage Rate Oulook (fixed rate, interest, credit, mortgage rates)

[GuitarPlayr]

We are currently in the process of selling our home and building another. It will take roughly 5-6 months for the build. If we do not sell our house in the next 90 days, we will cancel the new house.

The problem that I am having is mortgage rates lol. They are creeping up and there is no way I want to lock in yet. There are just too many unknowns at the moment.

For all of you experts, what is the current outlook over the next 5 months or so? Are rates expected to keep climbing or leveling out? I miss seeing that 4.85% fixed rate from a month ago.

[2bindenver]

No one has a crystal ball.

Get over what you can't change.

[GuitarPlayr]

Originally Posted by 2bindenver

No one has a crystal ball.

Get over what you can't change.

No kidding? You are aware that there are people called analyst that use market conditions to forecasts economic outlook right? Granted it is a best guess situation but they use a variety of factors to reach their conclusions.

[gold*dust1]

Originally Posted by GuitarPlayr

We are currently in the process of selling our home and building another. It will take roughly 5-6 months for the build. If we do not sell our house in the next 90 days, we will cancel the new house.

The problem that I am having is mortgage rates lol. They are creeping up and there is no way I want to lock in yet. There are just too many unknowns at the moment.

For all of you experts, what is the current outlook over the next 5 months or so? Are rates expected to keep climbing or leveling out? I miss seeing that 4.85% fixed rate from a month ago.

Hmmm I didn't know you could cancel a new house that easily unless you had a contingency

Seems kinda unfair to the builder and like the ball would all be in your court. Wouldn't you have to put like several thousand down to even start a build?? Prepared to lose it??

We got that great rate you're talking about! I think them days are over.

[GuitarPlayr]

We put 8k down that is 100% refundable up until dry wall begins per the contract which is roughly 90 days. So we have that many days to sell out house so we will see. Obviously I am not going to gamble with the possibility of two house payments and they know that also.

[Rakin]

Barrack called me last night to get my opinion. I told him we should kick rates on up to 6% next spring since all the stimulus money will be in place and the country will be going like gang busters. If inflation rears it's very ugly head we may see 6.5 and as high as 7.5% to start.

I would lock a rate as soon as you can since they have no where to go but up. The rates we've seen the last 6 months won't be back in my life time. I bought a home in April which was new construction and got 4 3/8 for a 15 year loan.

That doesn't really mean anything to you but I like to throw out a little bragging to hurt everyones feelings that they did not jump on the unbelievable rates when they had a chance.

Anything below 6.5% is a great rate.

[GuitarPlayr]

Nice rate Rakin. Our house should be up next week and as soon as we close on it, I will lock a rate somewhere. They are selling fast in my neighborhood so I am hoping in 30 days. Just not looking forward to an apartment for many reasons.

[Rakin]

We sold our home in Oct 08 and once we were sure the contract was secure we contracted with the builder. We did not want 2 house payments which is what gets many people in trouble. We found an apartment that did us a 7 month lease and it was no fun but not terrible since we are empty Nester's. It's a small price to pay to make sure you have your home sold.

Keep in mind school will be starting soon and that's the sign of the market that will be slowing through the holidays. You may need the time to get your home sold.

Good luck on the build job, it can be exciting and don't forget to get an independent inspector out the day before you do your walk through.

[elflord1973]

Originally Posted by GuitarPlayr

We are currently in the process of selling our home and building another. It will take roughly 5-6 months for the build. If we do not sell our house in the next 90 days, we will cancel the new house.

The problem that I am having is mortgage rates lol. They are creeping up and there is no way I want to lock in yet. There are just too many unknowns at the moment.

For all of you experts, what is the current outlook over the next 5 months or so? Are rates expected to keep climbing or leveling out? I miss seeing that 4.85% fixed rate from a month ago.

Long term, the answer is pretty simple -- rates are mean reverting, and will return to historical norms.

How they get there is a little harder to answer.

Whether they stay down or not in the short term, depends on whether the government can stop 10 year and 30 year treasury yields creeping up. They're using just about every trick in the book and a few tricks out of the book to keep credit cheap, so it's largely about the bond yields.

Pulling rates straight off the yield curves points to a steep increase in rates ( Prime Rate Forecast: Projected Prime Rate Values 2009-2039 ) but this approach is a little misleading, because the low rates at the front end of the curve are due to "flight to safety" (lots of money piling into short term government debt, the investors "cash under the mattress")

The interest rate outlook is a big unknown (and to the extent that there are "knowns", they tend to favor borrowing now and not later), so if there's anyway that you can make progress on "knowing" some of the other "unknowns", that may help.

For example, it really makes sense to do whatever it takes to get your house sold in 90 days (good marketing, price it right, stage it, etc). I don't know if you were thinking about borrowing costs for you, but your buyer will also need financing. Higher rates means it's harder for you to get a good price for the place, so you get hit with a double-whammy if rates go up.