How low can we go? 30 yr fixed at 3.75% with no fees...

I actually don't know where investors are putting their money right now. Stocks are down and MBS are down. Crypto?  ;D
 
Glad I signed my refi docs on Thursday and will be closing on Tuesday.

2.375% for my primary home at no cost
2.625% for my 2nd home in Vegas at no cost
3.125% for a OC rental

I have 2 other rentals with loans in the $100s range on ARM loans so made no sense in refinancing and those rates just adjusted down to 2.625%.

I'll be opening up a few HELOCs for liquidity to help my buyers buy homes for cash in my primary and 2nd home.  Third Federal has a HELOC at Prime -0.75% up to $200k and USC Credit Union has a HELOC at Prime -0.25% up to $250k both up to 80% LTV.  PenFed can handle the HELOC for the 2nd home.
 
My friend who was doing their refi with Owning got messed up by the Guaranteed Rate acquisition. The story is they couldn't finish it out because of the merger so now they have to restart. Feel bad for them because I think rates were lower vs now.
 
irvinehomeowner said:
My friend who was doing their refi with Owning got messed up by the Guaranteed Rate acquisition. The story is they couldn't finish it out because of the merger so now they have to restart. Feel bad for them because I think rates were lower vs now.
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And most of the refi business will begin to dry up like the desert once rates go over 3%...what wonderful timing on the purchase of Owning.  haha
 
USCTrojanCPA said:
I'll be opening up a few HELOCs for liquidity to help my buyers buy homes for cash in my primary and 2nd home.
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Interesting, do these buyers pay you back with interest? Or this is just to get the home and then refi cash out to pay you back?
 
Cares said:
USCTrojanCPA said:
I'll be opening up a few HELOCs for liquidity to help my buyers buy homes for cash in my primary and 2nd home.
Click to expand...

Interesting, do these buyers pay you back with interest? Or this is just to get the home and then refi cash out to pay you back?
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I buy the home for all cash, the day after I close on the purchase I get into contract with them to purchase at the same price, the resale rebate that I would have given takes care of the buyerside/sellerside closing costs on my end, and they pay me rent on the home until they close on it.  I only do it for move-up buyers that have an exit property to sell so I pick up the listing as well.  I've purchased 2 homes for all cash for 2 buyers already.  All cash offers work well outside of Irvine, still have to get close to the highest offer to get the home.
 
irvinehomeowner said:
Yeah, not sure how many homes in Irvine you can do all-cash with because the prices are just bonkers.

So much "pain".
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None in Irvine because I'm not that special being a cash buyer in Irvine...outside of Irvine it's a different story.
 
-44 bps today. Another blood bath day. We're about to reach death cross in about 2 weeks with 50 day moving average crossing over 200 day.
 
Cares said:
-44 bps today. Another blood bath day. We're about to reach death cross in about 2 weeks with 50 day moving average crossing over 200 day.
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Refinance market is drying up...are buyers going to the sidelines too?
What are mortgage professionals anticipating? Continued rise in rates or will it level off?
 
I don't think we're getting sub 3% rates unless they remove 0.5 refinance fee but I don't see that happening either.
 
I can still do purchase under 3%. There's more room to work with on a purchase since the borrower pays closing costs. On a refinance people expect no point no fee so we need larger margins to cover costs.
 
Sub 3% still exists in fixed and ARM products for purchase loans. Refinance terms are hit and miss. There are a boatload of new loan companies who have never experienced an air pocket - rates suddenly moving away with no market guidance to offer - so there will be plenty of over promising and zero delivery on rates soon. Anyone in the mortgage business for more than 15 years has seen this already 2-3 times already. This isn't new.

Generalizing on rates now  - For a great while it made no sense to refinance a 30 year fixed rate to a 10/1 ARM at 2.5% when you could get 2.625 or so on a fixed rate. Now... with refinance rates higher, that 2.5% 10/1 ARM comes back into focus. ARM products don't have the same yield spreads as fixed rates do, so getting a zero fee ARM is very difficult. If we see a 3.25 average refinance rate, then ARM's will be in the mid-upper 2's with reasonable costs. Refinance to an ARM with costs, then again this time at no cost if and when fixed rates return to the 2's.

Sky high unemployment, deferred rent being recaptured, no upward movement for income (anyone getting a bonus in 2021 BTW?) a coming collapse in commercial real estate, the Student Loan debt bomb not being defused, and shenanigans to come with the economy from this present Congress, you can assume the next two years will be difficult, and thus rates not shooting to the moon.

My .02c
 
For today, a 7/6 ARM about 0.25% lower in rate than a 30 fixed for me for refinance.

5/6 and 10/6 ARM rates are not as favorable as 7/6 today.
 
I'm showing a .375 spread between a 30 fixed with costs and a 7/6 with costs. YMMV between companies.

As an FYI with the LIBOR index being replaced with SOFR based loans, most Agency loans are now 6 month adjustables, not 1 year.  SOFR is Secured Overnight Financing Rate - an average cost of borrowing cash overnight collateralized by Treasuries.  SOFR is a single index currently compared to the wide range of LIBOR indexes.

If anyone needs a bit of slumber inducing materials to read, here's a pretty good resource on SOFR:

https://www.pensford.com/resources/libor-vs-sofr/

 
Also, if borrowers are looking to refinance sub 3s it certainly is still doable by paying closing costs or points. Usually breakeven is only several years but I think everyone has gotten so accustomed to hearing about no fee refinancing this is what they are conditioned to want.
 
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