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

FYI - At 5 points you're able to get into the low to mid 2% range on a 15 year fixed rate - purchase or refinance, sub $417k. Sellers / Agents can contribute up to 6% of the purchase price when 20% or more is put down. Most lenders have a "floor rate" when it comes to pricing loans however some might reach down sub 2% with enough points paid.

The many buyers don't look through the prism of "ownership" but "tax benefit" when buying a home. There is a lack of a substantial MID writeoff with a low rate loan. Is the MID worth giving up when you're plowing so much cash into the principal? It's an interesting sell, one that is worth exploring.

My .02c
 
Soylent Green Is People said:
The many buyers don't look through the prism of "ownership" but "tax benefit" when buying a home. There is a lack of a substantial MID writeoff with a low rate loan. Is the MID worth giving up when you're plowing so much cash into the principal? It's an interesting sell, one that is worth exploring.

My .02c
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That's because most buyers are financially illiterate. It's never good to pay one dollar to save 30-40 cents.
 
Soylent Green Is People said:
FYI - At 5 points you're able to get into the low to mid 2% range on a 15 year fixed rate - purchase or refinance, sub $417k. Sellers / Agents can contribute up to 6% of the purchase price when 20% or more is put down. Most lenders have a "floor rate" when it comes to pricing loans however some might reach down sub 2% with enough points paid.

The many buyers don't look through the prism of "ownership" but "tax benefit" when buying a home. There is a lack of a substantial MID writeoff with a low rate loan. Is the MID worth giving up when you're plowing so much cash into the principal? It's an interesting sell, one that is worth exploring.

My .02c
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Well most people don't have the money to put down to buy points, especially with the market prices at where it is. 
 
For this new Wealth Building Home loan, if you have a high enough downpayment, can't you roll those points into the mortgage...it's not like the interest on that is much (at ~0.1%)?  What about the points as a deduction on your taxes?  Can you write them off all in one year if paid upfront? 
 
My pricing on amortizing 5/1 and 7/1 are identical (3.125%).
Now, I'm considering an Interest Only, which will bump the rate to 3.375%, but give me added flexibility.

I know TI is 5/1 Land, but anyone have any strong pro/con feelings on IOs?
 
IO is preferred if you can qualify for it. The rules for these loans tend to be very restrictive given the risk profile they represent. As seen with IO Option ARM's, in some peoples hands they were great. Others... not so much.

If you intend to amortize the loan as fast as possible, interest charges on IO loans are based on the principal balance. If you put X down on principal in December, your January payment will have lower interest costs, and so on as you pay down the balance faster. 
 
Where are you seeing these IO loans?

Does that mean we will see the return of the Options ARMs too?

Personally, we used an Option ARM long ago, used the IO payment and it was great in helping manage cash flow but seeing the principal balance not move after a few years made us finance into a 30-year when rates dropped.
 
irvinehomeowner said:
Where are you seeing these IO loans?

Does that mean we will see the return of the Options ARMs too?

Personally, we used an Option ARM long ago, used the IO payment and it was great in helping manage cash flow but seeing the principal balance not move after a few years made us finance into a 30-year when rates dropped.
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I dont think they're widely available.
I have a "special relationship."
 
IO is available. They do require a terrific amount of post closing cash reserves and you qualify under very tight ratios. Major banks have it, along with a few mortgage bankers.

Option ARM's are for all intents and purposes banned. Never say never though....
 
IO rate is too high a price to pay for the added flexibility. I wouldn't do it unless I had a very good reason I wanted the extra funds. But I like the concept of io.

3.125 also seems too high for a regular 5/1.
 
Holy falling yields...it's at around 2.21 with an overnight low of 2.18.  We are getting back into 2012 levels.

I guess Germany and US treasuries are the two places people are flocking to put their money in with the stocks correcting.
 
Saw a 3.75% 30yr jumbo with $6000 in lender credits.  Annie Mac thru Zillow.  5/1 ARM Jumbo saw 2.5% yesterday with Annie Mac, can't wait to see what RWM will have today
 
ps9 said:
Saw a 3.75% 30yr jumbo with $6000 in lender credits.  Annie Mac thru Zillow.  5/1 ARM Jumbo saw 2.5% yesterday with Annie Mac, can't wait to see what RWM will have today
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Let us know what u see. Your quotes are somehow better than everyone else's :)
 
qwerty said:
ps9 said:
Saw a 3.75% 30yr jumbo with $6000 in lender credits.  Annie Mac thru Zillow.  5/1 ARM Jumbo saw 2.5% yesterday with Annie Mac, can't wait to see what RWM will have today
Click to expand...

Let us know what u see. Your quotes are somehow better than everyone else's :)
Click to expand...

I'm glad it's not just me.
I'm not seeing 5/1 at 2.5%.
Maybe I'm in SuperJumbo range though.
 
It's the LTV that pushes the rate further down. 70-80% is X, and 55-69.9 is X minus.

Althought the 10 yr T is falling, mortgage rates aren't tied directly to that security - it's an indicator of the direction of rates. Watch the MBS market when possible for the price of mortgage rates. Given rate swings (just like Stock market movement) banks aren't giving away their product as low as they could without some confirmation we're going to see all rates this low for some time (needing QE4EVER to do so). It's uncharted territory come November when the Fed pulls back and part of the reason rates aren't in the 3's across the board. 

Once lenders hit index plus margin - about 2.375-2.50% that's about as far down as you'll likely see 5/1 ARM rates for -0- pts. -0- fees. It would be great if I'm wrong and time will tell.
 
10/15/2014: 10yr T 1.99%

Sub 4x% 30 fixed back again pretty much across the spectrum.

Some thoughts at these levels: A couple of additional -200pt stock market days and the whispering about QE4 / low rates forever is going to get significantly louder. Rates don't fall to the ground, nor do stocks. There will likely be a snap back rally in stocks in some near term. Mortgage rates will torque back higher when that happens. The old saw "make hay while the sun shines" applies here. If you can get .125-.25% better than what you have, take it. In 6 months loan rates could be above 4.0% (who knows), or below 3.5% (who knows). If you capture 3.75%, it's always possible to refinance again for free should the current trend continue lower into 2015.

My .02c

 
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