How low can we go? 30 yr fixed at 3.75% with no fees...
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zubs
Well-known member
Can someone refute this argument:
Interest rates will never go up again. It will stay flat to declining forever. The reason is because of the US governments own debt. US debt is so high now that any increase in interest rates will cause the servicing of US debt to become unmanageable. Therefore interest rates will never go up again.
Interest rates will never go up again. It will stay flat to declining forever. The reason is because of the US governments own debt. US debt is so high now that any increase in interest rates will cause the servicing of US debt to become unmanageable. Therefore interest rates will never go up again.
irvinerealtor
New member
zubs said:
Yes. I refute the premise that an increase of interest will cause the debt servicing to "become" unmanageable.
I counterpropose that it already IS unmanageable.
Eventually, because of the high amount of existing debt, the popular belief (aka, the marketplace) will have no confidence that new or existing debts will be able to be paid. Interest rates will soar at that time, as they have in the past because whoever needs it, will pay through the nose to get it.
-IR2
"It's like a carousel. You put the quarter in, you get on the horse, it goes up and down, and around. Circular, circle. Feel it. Go with the flow." - Gary Potter
usctrojancpa
Well-known member
Interest rates will go up eventually, when and by how much are the big questions that no one knows. Remember, the market can stay irrational longer than you can stay liquid/solvent.zubs said:
WoodburyDad
New member
USCTrojanCPA said:
That?s correct.
They are attempting to keep rates low by selling the short end and buying the long end, known as Operation Twist.
zubs
Well-known member
So our government will try to keep interest rates down for as long as they can, but in the end they will not be able to contain it from exploding upwards.
So the big question is:
How long can the Bernanke hold down interest rates?
~Apparently he's running out of tools as every 500 billion dollars he QEs, has less and less of an effect.
So the big question is:
How long can the Bernanke hold down interest rates?
~Apparently he's running out of tools as every 500 billion dollars he QEs, has less and less of an effect.
IndieDev
New member
Ben is a suicidal dickhead.
He'll keep printing until the banks become solvent again (in 40-50 years), or society collapses under hyper inflation, and you can't buy a loaf of bread for $500,000,000 U.S. By then some starving mob will probably have eaten Ben, starting at his feet.
He'll keep printing until the banks become solvent again (in 40-50 years), or society collapses under hyper inflation, and you can't buy a loaf of bread for $500,000,000 U.S. By then some starving mob will probably have eaten Ben, starting at his feet.
usctrojancpa
Well-known member
But how do we get to hyperinflation when we still have trillions in realized bank losses? My understanding is that defaults are a deflationary force and they bring the velocity of money down to a trickle. The FED is basically propping up a lot of insolvent banks until they become solvent (could take a decade or more). So once the losses have been through the system, then I think the velocity of money will increase and inflation with it. Look how long Japan's rates have been low, we are going into the third decade and their debt is a lot higher than ours. It's a sucker's game to try to predict when and by how much rates will increase. Heck, they can even go lower than they already are.IndieDev said:
zubs
Well-known member
Bernanke says we will have low interest rates until at least 2014.
The US will collapse if interest move too far up.
Therefore, interest will never go up again if the government can help it.
Collapse definition
1. Run on banks
2. Empty shelves at the market
3. Unable to get paid by employer
4. CC stop working
I don't think the world wants a collapse, and we may not be able to stop it, but we will throw everything we have to prevent it until it actually happens...possibly 10+ years, but 10 years predictions are BS so, gotta keep looking at it to see where we @.
The US will collapse if interest move too far up.
Therefore, interest will never go up again if the government can help it.
Collapse definition
1. Run on banks
2. Empty shelves at the market
3. Unable to get paid by employer
4. CC stop working
I don't think the world wants a collapse, and we may not be able to stop it, but we will throw everything we have to prevent it until it actually happens...possibly 10+ years, but 10 years predictions are BS so, gotta keep looking at it to see where we @.
usctrojancpa
Well-known member
In the meanwhile, I think I'll refi a few of my properties.zubs said:
usctrojancpa
Well-known member
I'm right there with you....BLUE HORSESHOE LOVES 7/1 ARM around 2.625%.zubs said:
usctrojancpa
Well-known member
I really should since rates have come down a good bit since I posted it. Give me a few days and I'll get it updated for the current rates. First i need to post the thread about my home.rkp said:
homer_simpson
Well-known member
USCTrojanCPA said:
Can't wait!! thanks Martin 8)
usctrojancpa
Well-known member
Got the pool & spa up to speed last week so I'll include a before and after picture of that as well.homer_simpson said:
irvinehomeowner
Well-known member
Some questions you may want to answer in your House Hunters post:
1. So was a pool home one of your criteria?
2. What made you choose the neighborhood you bought in?
3. What other factors were buy/don't buy criteria?
4. Why didn't you buy in Santa Ana and just send your kids to private school? (<--- kidding... I know you don't have kids)
5. Why did you buy now?
I probably have more but will ask when your epic thread has been posted.
1. So was a pool home one of your criteria?
2. What made you choose the neighborhood you bought in?
3. What other factors were buy/don't buy criteria?
4. Why didn't you buy in Santa Ana and just send your kids to private school? (<--- kidding... I know you don't have kids)
5. Why did you buy now?
I probably have more but will ask when your epic thread has been posted.
usctrojancpa
Well-known member
We are slowing grinding down towards 3.50% at no cost on the 30-year fixed.
sgip
Well-known member
Some, but not all rates are improving. From a daily Email I get on the mortgage market:
"Agency mortgage-backed security prices are on the moon: at the close on Friday Fannie, Freddie, and Ginnie 3.5% securities closed at roughly 104, 103.875, and 105.5, respectively. For the sake of simplicity, let's say those are the prices of 4% 30-yr mortgages. Are borrowers seeing those rates at those prices? Of course not - a four point premium for a 4% conventional loan or five points for a FHA/VA, even when you throw in the value of servicing? Companies have too much overhead now to pass all that along, of course, too much buy back risk, too many reserves to set aside, too much whatever, and on top of that, many lenders are at capacity - they don't have to!"[/b]
Emphasis mine.
If 3.5% for -0- fee comes on the radar, as it did in 2010 and 2011, it existed for only 2-3 days. It was followed by a pretty sharp rebound in rates above 4.0%.
With all of the HARP v 2.0 (and HARP 3.0 coming) Mortgage Backed Securities buyers are not going to invest in something that doesn't have an extended shelf life. That's a small part of the reason why we're not seeing rates back down into the mid 3's.
"Agency mortgage-backed security prices are on the moon: at the close on Friday Fannie, Freddie, and Ginnie 3.5% securities closed at roughly 104, 103.875, and 105.5, respectively. For the sake of simplicity, let's say those are the prices of 4% 30-yr mortgages. Are borrowers seeing those rates at those prices? Of course not - a four point premium for a 4% conventional loan or five points for a FHA/VA, even when you throw in the value of servicing? Companies have too much overhead now to pass all that along, of course, too much buy back risk, too many reserves to set aside, too much whatever, and on top of that, many lenders are at capacity - they don't have to!"[/b]
Emphasis mine.
If 3.5% for -0- fee comes on the radar, as it did in 2010 and 2011, it existed for only 2-3 days. It was followed by a pretty sharp rebound in rates above 4.0%.
With all of the HARP v 2.0 (and HARP 3.0 coming) Mortgage Backed Securities buyers are not going to invest in something that doesn't have an extended shelf life. That's a small part of the reason why we're not seeing rates back down into the mid 3's.