Refinance Worth It?
#41
The sizzle in the Steak
Fannie & Freddie write the guidelines for the loans that they will accept. These become the rules for what type of loans to fund. Loans that meet F/F guidelines are marketable. Most other loans are kept by the lender or portfolio loans and I'm not sure anyone is doing many of those these days.
I was throwing out a bit of sarcasm....being that F/F are in such a deep hole...so heavily propped up by the Fed cash machine, what's the point of "guidlines" when the Fed keeps throwing money at a "lost cause".
#42
Racer
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I hate to break it to you, but we are well beyond those types of borrowers now. sure, those who did 0% down are really in a bad position now but whats worse, even those who had 20% + downpayments are ALSO underwater...the loss of value in most areas of the country has surpassed 20%....so your comments about irresponsible borrowers is totally out the window.
If you look at the Case-Schiller index, it's true that prices declined over 20% (they dropped 19% between 1Q2008 and 1Q2009), but that's on top of a run up since 1996 of over 5% a year for 10 years running, and an up trend since 1991. As of today, prices are back to 2004 levels.
Some localities certainly had bigger swings, but I don't know of any that had bigger swings down since 2008 than they had swings going up for a much longer stretch ahead of it.
Last edited by johnnysquire; 09-03-2010 at 01:14 PM.
#43
Team Owner
Received my mortgage commitment today.
Will close later this month.
Will close later this month.
#45
Team Owner
Finally closed
Will update in 15 years
Will update in 15 years
#47
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I'm going to wait a few more weeks. Have everything set up to lock but want to see what effect the Feds plans will have on rates.
Currently I can get 3.75 with 1.375 points. Drops my payment almost $150 a month. Will break even in under 3 years.
Currently I can get 3.75 with 1.375 points. Drops my payment almost $150 a month. Will break even in under 3 years.
#48
Team Owner
The interest I paid over the last 5 years on my old 30 year makes me want to throw up.
It's funny how the brain thinks "this is no problem" when signing on the dotted line but then says "WTFBBQ!?!" when looking back.
I will save $7k on interest next year.
It's funny how the brain thinks "this is no problem" when signing on the dotted line but then says "WTFBBQ!?!" when looking back.
I will save $7k on interest next year.
#50
The sizzle in the Steak
Got my eye on the next few weeks before I pull the trigger again as well.
#51
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I was paying only $188 towards the principal each month on the regular payment plus an extra $100 month.
Now We are paying over $600 a month towards the principal.
We bought the house w/ Almost nothing down. We went with an 80/20 loan. Our credit scores were above 720 but with little to put down the rates were higher in 2006.
on the 30 yr 80% was 6.75 and the 20% was 9%.
We are now @ 4% with no points and our mort is 15 years and only $80 more than we were spending before.
#52
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Fed Will Buy $600 Billion in Debt, Hoping to Spur Growth
Rates should be going lower.
Sorry for the ginormous (a.k.a fibonacci" article)
http://www.nytimes.com/2010/11/04/bu...c.html?_r=1&hp
Sorry for the ginormous (a.k.a fibonacci" article)
http://www.nytimes.com/2010/11/04/bu...c.html?_r=1&hp
WASHINGTON — The Federal Reserve, concerned about the slow recovery, announced a second, large purchase of Treasury bonds on Wednesday, an effort to spur economic growth by lowering long-term interest rates.
The Fed said it would buy an additional $600 billion in long-term Treasury securities by the end of June 2011, somewhat more than the $300 billion to $500 billion that many in the markets had expected.
The central bank said it would also continue its program, announced in August, of reinvesting proceeds from its mortgage-related holdings to buy Treasury debt. The Fed now expects to reinvest $250 billion to $300 billion under that program by the end of June, making the total asset purchases in the range of $850 billion to $900 billion.
That would just about double the $800 billion or so in Treasury debt currently on the Fed’s balance sheet.
While the Fed has been signaling that it would act to bolster the economy, the announcement was the first major policy move since the midterm elections, which gave Republicans control of the House and heightened the potential for gridlock on fiscal policy including tax cuts and spending to encourage job creation and growth.
In justifying its decision, the Fed noted that unemployment was high and inflation low, and judged that the recovery “has been disappointingly slow.”
The Federal Open Market Committee, which ended a two-day meeting on Wednesday, also left open the possibility of additional purchases.
“The committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability,” the committee said.
As expected, the Fed left the benchmark short-term interest rate — the federal funds rate, at which banks lend to each other overnight — at nearly zero, where it has been since December 2008. The committee’s vote was 9 to 1.
Thomas M. Hoenig, the president of the Federal Reserve Bank of Kansas City, dissented, as he has at every meeting this year. Mr. Hoenig “was concerned that this continued high level of monetary accommodation increased the risks of future financial imbalances and, over time, would cause an increase in long-term inflation expectations that could destabilize the economy,” the Fed said in a statement.
Economists disagree about how much the new round of debt purchases — a reprise of an initial, $1.7 trillion round that ended in March — will have on spurring consumer and corporate demand.
Lower long-term interest rates in theory should ripple through the markets, affecting other rates, like those of 30-year, fixed-rate mortgages. That could encourage homeowners to refinance into cheaper mortgages, though it would not help the millions of Americans facing foreclosure.
But there are several significant risks. The new actions are likely to further drive down the value of the dollar, which as fallen about 7.5 percent since June against the currencies of major trading partners. That could exacerbate the trade and exchange-rate tensions that have threatened to unravel cooperation among the world’s biggest economies.
Moreover, the Fed is exposing itself to the risk that the assets it has purchased, like the $1 trillion in mortgage-related securities on its balance sheets, could shrivel in value as interest rates rise. That could reduce the amount of money the central banks turns over to the Treasury each year, and expose the Fed — which has been attacked for failing to prevent the 2008 financial crisis — to further criticism.
And then there is a risk that the Fed’s action could be neutralized by a new Congress that has vowed to contract government spending, a core argument that led to the overwhelming Republican victory on Tuesday.
Mr. Obama, at a news conference on Wednesday, talked of compromise with the new Republican majority in the House. But he also cited China’s new high-speed trains and its advances in supercomputing to make the case that there are some areas where the United States needs to make investments, and insisted that the country would not shy away from those. “They are making investments, because they know those investments will pay off in the long term,” he said of the Chinese, seeming to suggest that the United States needs to do the same.
At the same moment, he reiterated that he would support continuing the Bush era tax cuts only for families earning less than $250,000 a year. “It is very important we’re not taking money out of the system from people who are most likely to spend that money,” Mr. Obama said at the news conference.
But he hinted at flexibility, saying he expected to sit down with the new Republican leadership to see “where we can move forward first of all in ways that can do no harm.”
Asked if he was willing to negotiate, he said, “Absolutely.”
Laurence H. Meyer, a former Fed governor who closely monitors the central bank, said the prospect of sustained fiscal gridlock had already pushed Mr. Bernanke to move.
“Bernanke has said that fiscal stimulus, accommodated by the Fed, is the single most powerful action the government can take for lowering the unemployment rate ,when short-term rates are already at zero,” Mr. Meyer said. “He has nearly pleaded with Congress for fiscal stimulus, but he can’t count on it. So he has to act as if that’s not going to happen. “
Mr. Meyer predicted: “The political drama is just beginning.”
Leonard J. Santow, an economic consultant, said he feared that the Fed was reacting to one mistake — the failure of fiscal policy — by adding another.
“Monetary policy is already unsustainably easy, and adding to the Fed’s generosity through more quantitative easing will do little to stimulate the economy,” Mr. Santow said. “The main problem is on the fiscal side and there is nothing wrong with the Fed chairman making budget recommendations and admitting there is not a great deal left for monetary policy to achieve when it comes to stimulating the economy.”
The Fed lowered short-term interest rates to nearly zero in December 2008, and subsequently bought $1.7 trillion in mortgage-backed securities and government securities, a program that was phased out last March.
Only months ago, the Fed was talking about returning to normal monetary policy and discussing the timetable for eventually raising interest rates and tightening the supply of credit, as it would normally do after a recession has ended.
But this recession and its painful aftermath have been anything but normal. Global financial markets were set back in the spring by the European debt crisis in Europe, and over several months, Fed officials gradually became convinced that their only option was to step back in again.
The Fed said it would buy an additional $600 billion in long-term Treasury securities by the end of June 2011, somewhat more than the $300 billion to $500 billion that many in the markets had expected.
The central bank said it would also continue its program, announced in August, of reinvesting proceeds from its mortgage-related holdings to buy Treasury debt. The Fed now expects to reinvest $250 billion to $300 billion under that program by the end of June, making the total asset purchases in the range of $850 billion to $900 billion.
That would just about double the $800 billion or so in Treasury debt currently on the Fed’s balance sheet.
While the Fed has been signaling that it would act to bolster the economy, the announcement was the first major policy move since the midterm elections, which gave Republicans control of the House and heightened the potential for gridlock on fiscal policy including tax cuts and spending to encourage job creation and growth.
In justifying its decision, the Fed noted that unemployment was high and inflation low, and judged that the recovery “has been disappointingly slow.”
The Federal Open Market Committee, which ended a two-day meeting on Wednesday, also left open the possibility of additional purchases.
“The committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability,” the committee said.
As expected, the Fed left the benchmark short-term interest rate — the federal funds rate, at which banks lend to each other overnight — at nearly zero, where it has been since December 2008. The committee’s vote was 9 to 1.
Thomas M. Hoenig, the president of the Federal Reserve Bank of Kansas City, dissented, as he has at every meeting this year. Mr. Hoenig “was concerned that this continued high level of monetary accommodation increased the risks of future financial imbalances and, over time, would cause an increase in long-term inflation expectations that could destabilize the economy,” the Fed said in a statement.
Economists disagree about how much the new round of debt purchases — a reprise of an initial, $1.7 trillion round that ended in March — will have on spurring consumer and corporate demand.
Lower long-term interest rates in theory should ripple through the markets, affecting other rates, like those of 30-year, fixed-rate mortgages. That could encourage homeowners to refinance into cheaper mortgages, though it would not help the millions of Americans facing foreclosure.
But there are several significant risks. The new actions are likely to further drive down the value of the dollar, which as fallen about 7.5 percent since June against the currencies of major trading partners. That could exacerbate the trade and exchange-rate tensions that have threatened to unravel cooperation among the world’s biggest economies.
Moreover, the Fed is exposing itself to the risk that the assets it has purchased, like the $1 trillion in mortgage-related securities on its balance sheets, could shrivel in value as interest rates rise. That could reduce the amount of money the central banks turns over to the Treasury each year, and expose the Fed — which has been attacked for failing to prevent the 2008 financial crisis — to further criticism.
And then there is a risk that the Fed’s action could be neutralized by a new Congress that has vowed to contract government spending, a core argument that led to the overwhelming Republican victory on Tuesday.
Mr. Obama, at a news conference on Wednesday, talked of compromise with the new Republican majority in the House. But he also cited China’s new high-speed trains and its advances in supercomputing to make the case that there are some areas where the United States needs to make investments, and insisted that the country would not shy away from those. “They are making investments, because they know those investments will pay off in the long term,” he said of the Chinese, seeming to suggest that the United States needs to do the same.
At the same moment, he reiterated that he would support continuing the Bush era tax cuts only for families earning less than $250,000 a year. “It is very important we’re not taking money out of the system from people who are most likely to spend that money,” Mr. Obama said at the news conference.
But he hinted at flexibility, saying he expected to sit down with the new Republican leadership to see “where we can move forward first of all in ways that can do no harm.”
Asked if he was willing to negotiate, he said, “Absolutely.”
Laurence H. Meyer, a former Fed governor who closely monitors the central bank, said the prospect of sustained fiscal gridlock had already pushed Mr. Bernanke to move.
“Bernanke has said that fiscal stimulus, accommodated by the Fed, is the single most powerful action the government can take for lowering the unemployment rate ,when short-term rates are already at zero,” Mr. Meyer said. “He has nearly pleaded with Congress for fiscal stimulus, but he can’t count on it. So he has to act as if that’s not going to happen. “
Mr. Meyer predicted: “The political drama is just beginning.”
Leonard J. Santow, an economic consultant, said he feared that the Fed was reacting to one mistake — the failure of fiscal policy — by adding another.
“Monetary policy is already unsustainably easy, and adding to the Fed’s generosity through more quantitative easing will do little to stimulate the economy,” Mr. Santow said. “The main problem is on the fiscal side and there is nothing wrong with the Fed chairman making budget recommendations and admitting there is not a great deal left for monetary policy to achieve when it comes to stimulating the economy.”
The Fed lowered short-term interest rates to nearly zero in December 2008, and subsequently bought $1.7 trillion in mortgage-backed securities and government securities, a program that was phased out last March.
Only months ago, the Fed was talking about returning to normal monetary policy and discussing the timetable for eventually raising interest rates and tightening the supply of credit, as it would normally do after a recession has ended.
But this recession and its painful aftermath have been anything but normal. Global financial markets were set back in the spring by the European debt crisis in Europe, and over several months, Fed officials gradually became convinced that their only option was to step back in again.
#53
The sizzle in the Steak
I dunno about for QE2.....it's plain scary.
As far as interest rates dropping...sure, take advantage while you can.
All aboard the currency race to the bottom....inflation monster is a coming!
As far as interest rates dropping...sure, take advantage while you can.
All aboard the currency race to the bottom....inflation monster is a coming!
#54
Team Owner
For those that have done this, how long did it take the title company to pay off your previous mortgage after closing? I closed last week and it looks like my old mortgage is still open.
#56
Team Owner
Thanks. These people are frustrating. Through the whole process it was very hard to get people to respond. When they did call back they needed something from me done that day. Every time was the same excuse, "oh we are very busy."
#57
Team Owner
http://news.yahoo.com/s/ap/20101111/...mortgage_rates :owell:
Mortgage rates fall to fresh lows this week
Mortgage rates fall to fresh lows this week
Mortgage buyer Freddie Mac said Tuesday the average rate for 30-year fixed loans fell to 4.17 percent from 4.24 percent last week. That's the lowest on records dating back to 1971.
The average rate on 15-year fixed loans fell to 3.57 percent from 3.63 percent. That's the lowest since the survey began in 1991.
The average rate on 15-year fixed loans fell to 3.57 percent from 3.63 percent. That's the lowest since the survey began in 1991.
The rates do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount.
The average fee for 30-year and 15-year fixed loans in Freddie Mac's survey was 0.8 point. It was 0.7 point for 1-year and five-year mortgages.
The average fee for 30-year and 15-year fixed loans in Freddie Mac's survey was 0.8 point. It was 0.7 point for 1-year and five-year mortgages.
#59
Drifting
Closed my refi a couple weeks ago. Was able to get locked into a 4% no points, no lender fee 30yr when the rates dropped huge about a month ago. Also was able to stop escrowing as well (I can pay my own bills thank you very much). Saved over $200 a month on interest.
#61
Since my original post, I looked into refinancing again at the end of November and decided to do it. Going from the original posted rate of 5.875% to 4.25% with no closing costs and will save around $150 a month. I wish I could've gotten lower, but eh well it's as good as it gets. I'll apply the savings to either the mortgage or my student loan payments once I figure out which has a lower interest rate.
#62
Team Owner
Looks like rates are starting to move up.
Loan Type Today Last Week
30 Year Fixed 4.97% 4.67%
15 Year Fixed 4.26% 4.04%
Loan Type Today Last Week
30 Year Fixed 4.97% 4.67%
15 Year Fixed 4.26% 4.04%
#63
Team Owner
Loan Type Today Last Week
30 Year Fixed 5.19% 4.91%
15 Year Fixed 4.55% 4.25%
btw, these are from bankrate.
Last edited by doopstr; 12-16-2010 at 10:20 AM.
#65
Suzuka Master
I refinanced from 6 down to 4.625%. It cost me 1.25 points but it was a jumbo loan and I kept it at the same bank without having to do any paperwork or reappraisal. Drops my monthly payments down by $800
#68
Team Owner
#69
Administrator Alumnus
I've been keeping a close eye on rates. There's the camp that thinks the ensd of QE2 will push rates up... But there are others that think the end of QE2 won't affect them much.
People are selling treasuries this week, pushing the 10yr back up a few tick. Still, 30yr at 4.75%. Quite a deal.
People are selling treasuries this week, pushing the 10yr back up a few tick. Still, 30yr at 4.75%. Quite a deal.
#70
The sizzle in the Steak
Them rates are falling big time!
#71
The sizzle in the Steak
...and they keep falling.
Pay attention peeps! Time to refi.
Pay attention peeps! Time to refi.
#72
Team Owner
How come I don't see much info online about 10 year mortgages? Do not many places offer them? How does the rate compare to 15 year?
Last edited by doopstr; 08-11-2011 at 11:14 AM.
#73
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It wouldn't make much sense for me to refi from 15 years 4% to 3.5 since we plan on moving in 4-5 years.
I will say this, after the closing fees and if we kept making normal payments before we refi'ed, we are almost at the $$ level we were at before we refied.
I now am taking a good $700 per month off the principal compared to $190 and we're good to go. It was well worth it to refi when we did in sept.
I will say this, after the closing fees and if we kept making normal payments before we refi'ed, we are almost at the $$ level we were at before we refied.
I now am taking a good $700 per month off the principal compared to $190 and we're good to go. It was well worth it to refi when we did in sept.
#74
Drifting
Wow - rates are nuts now. I got a 4% last time they went down on my 30yr. But now I can get a 15yr @ 3%. Insane...
I'm going to have to look closer at this.
I'm going to have to look closer at this.
#75
05/5AT/Navi/ABP/Quartz
#76
Drifting
I don't know much about mortgages. I am currently 2.5 years into a 30 fixed at 5%. I got a luck purchase on a bank owned home and I'm sure the home, even in this economy, is worth more than I paid. We have some wiggle room in our budget to pay some more each month if necessary.
What does everyone recommend? Stay put of re-fi?
What does everyone recommend? Stay put of re-fi?
#77
Team Owner
Only you can answer that. Find a spreadsheet on the web that can do an amortization table. Put your current mortgage in there and then put in what you think the new one would be. You then need to figure out how long you plan to stay in the house and how much you could save by refi. Factor in closing costs. Now that you have your savings, is it worth it?
#79
Suzuka Master