Author Topic: How low can we go? 30 yr fixed at 3.75% with no fees...  (Read 830530 times)

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Offline Cares

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3120 on: September 16, 2021, 08:03:08 AM »
FHFA Suspends Second Home, Investment Loan Limits

This should help improve rates for second and investment homes now. Many lenders didn't apply additional LLPAs already because their portfolio had room to absorb this type of loan mix.

So are you saying you have good rates for investment props, most likely I'd do a cash out too on the refi.

Cash out on investment properties get hit with pretty much all the rate adjustments so they are high. We can talk if you're interested to see what rates I can offer you though. Send me a PM.

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3121 on: September 28, 2021, 05:08:13 PM »

Cash out on investment properties get hit with pretty much all the rate adjustments so they are high. We can talk if you're interested to see what rates I can offer you though. Send me a PM.

Can you give us a ballpark figure?

Offline Cares

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3122 on: September 28, 2021, 05:40:48 PM »

Cash out on investment properties get hit with pretty much all the rate adjustments so they are high. We can talk if you're interested to see what rates I can offer you though. Send me a PM.

Can you give us a ballpark figure?

It's not possible to as the range is pretty wide on cash out investment properties. You can get hit anywhere between 3-6 points.

Offline Soylent Green Is People

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3123 on: October 08, 2021, 10:31:45 AM »
Cash out investment Loan Level Price Adjustment (LLPA) hits aren't as terrible when using a Non-Conforming fixed rate product compared to a Conforming or High Balance Conforming.

Assuming a 70% LTV transaction, Standard Conforming price hits are +2.125 for Non-Owner, .625 for cash out, .25 for LTV to 70% - 3 points total to price - pushing a 3.x rate handle into the mid to upper 3's to reduce the point cost.

The High Balance Conforming LLPA's add 1.0 point to the 3.0 already being charged. This makes it very difficult to structure a zero point rate that is reasonable.

A $1.00 over Standard Conforming jumbo cash out has an LLPA between .875 and 1.25%, however Non-Conforming rules sometimes prevent the self employed or multiple rental property owners refinance due to risk perception. At least you can still get a cash out refinance at a decent rate using something other than a High Balance Conforming loan.

My .02c
My .02c

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Offline Mety

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3124 on: October 08, 2021, 10:40:24 AM »
A question. While we have such appreciated high prices for our homes at the moment, would it make sense to do cash out refi? If we can do so while keeping the same or close rate (or even lower?), then why not? I know it reduces the principal amount if we sell the home, but if we're not planning to sell our homes right away and may be thinking of move up in 10 years or so, it might be a good option to enjoy this appreciation. If the home prices ever go down, we at least took the appreciated cash in our pocket. Thoughts?

Offline Compressed-Village

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3125 on: October 08, 2021, 05:14:48 PM »
Depends.

Are the capitals will be use to acquire assets producing income?


Will this offset the additional debts incurs?


Or is it for make me feel good?😀

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3126 on: October 08, 2021, 05:23:49 PM »
I wouldn't.

Best to take out a low to -minus margin HELOC as available dry powder. Qualifying is easier, you don't disrupt your 1st TD's amortizing, and you aren't paying interest on money you really aren't using. I'd expect a 2-3 interest rate, but are you guaranteed a 4-7 return? The key word is in bold....
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Offline fatduck

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3127 on: October 08, 2021, 05:44:07 PM »
A question. While we have such appreciated high prices for our homes at the moment, would it make sense to do cash out refi? If we can do so while keeping the same or close rate (or even lower?), then why not? I know it reduces the principal amount if we sell the home, but if we're not planning to sell our homes right away and may be thinking of move up in 10 years or so, it might be a good option to enjoy this appreciation. If the home prices ever go down, we at least took the appreciated cash in our pocket. Thoughts?
cash out refi is not like selling shares to realize gains.  you're just borrowing money from the bank with your home equity as collateral. 

Offline Compressed-Village

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3128 on: October 08, 2021, 05:49:30 PM »
I wouldn't.

Best to take out a low to -minus margin HELOC as available dry powder. Qualifying is easier, you don't disrupt your 1st TD's amortizing, and you aren't paying interest on money you really aren't using. I'd expect a 2-3 interest rate, but are you guaranteed a 4-7 return? The key word is in bold....


I would follow SLGP here.

Offline Cares

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3129 on: October 08, 2021, 08:29:04 PM »
I wouldn't.

Best to take out a low to -minus margin HELOC as available dry powder. Qualifying is easier, you don't disrupt your 1st TD's amortizing, and you aren't paying interest on money you really aren't using. I'd expect a 2-3 interest rate, but are you guaranteed a 4-7 return? The key word is in bold....

Like I mentioned before though, a HELOC can cause issues for future refinances unless it is closed or subordinated.

I have had clients who did a large cash out refi and then in 6 months refinanced the loan again to a lower non-cash out rate. Of course we were in a market that had rates decreasing unlike today.

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3130 on: October 08, 2021, 08:31:16 PM »
Because of the large loan amount that I'm looking at I'll need to put 25-30% down for my purchase but then I'll just open up a HELOC back up to 80% LTV to have the access to capital.
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Offline Cares

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3131 on: January 06, 2022, 12:58:04 AM »
Second home and High Balance loans are getting hefty LLPA adjustments for loans sold to FHFA after 4/1/2022.

Announcement: https://singlefamily.fanniemae.com/media/30326/display
Before and after LLPAs (page 3-4): https://singlefamily.fanniemae.com/media/9391/display

Second homes are getting anywhere from 1.125% to 3.875% point increase on loans. At the higher LTV levels this effectively will be the same as an investment property now.

High balance loans are getting between 0.25% to 0.75% point increase. A high-balance LLPA will not apply if any borrower on the loan is a first-time homebuyer and total qualifying income of all borrowers is less than or equal to 100% of the applicable area median income limit for the subject property’s location.

100% of area median income (AMI) in LA and OC counties are $86,100. So in order to avoid this rate hit you need to make less than this amount combined.
« Last Edit: January 06, 2022, 01:06:26 AM by Cares »

Offline Cares

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3132 on: January 06, 2022, 07:11:26 AM »
Also mortgage bonds have been a blood bath of late. Down about 130 bps since year end.

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Offline The California Court Company

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3133 on: January 06, 2022, 09:04:19 AM »
welcome sign to cool off the hot market....now need to regulate investment homes?
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Offline Cares

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3134 on: January 06, 2022, 09:39:14 AM »
This still won't provide any incentive for current homeowners to sell. If anything it would discourage any movement for 2nd and investment homes as they are currently "locked in" cheaply.

 

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