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

[rkp]

so if a great rate does hit the market for a few days, is there any way to get a loan without a house?  we want a house in the next 6 months.  i know locks exist but not sure on the cost and how it works.

 

[usctrojancpa]

so if a great rate does hit the market for a few days, is there any way to get a loan without a house?  we want a house in the next 6 months.  i know locks exist but not sure on the cost and how it works.

Gotta get into escrow first then you can pay for a forward lock.  The longer the lock period, the greater the cost.  That being said, with Europe having some major heartburn right now I don't think rates will rise that much in the next several months.

 

[woodburyowner]

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%.

I didn't even realize that the 3.5% rate was available for a few days in 2010 and 2011.  What would be the best way to get this rate when it hits?  Should I get prequalified now and have my paperwork on file at a lender so they can pull the trigger when the rate bounces down for a day or two?

 

[socal78]

The notary was at my place last night. Had a Refi Party.  Raised the roof! For right now, I still prefer a 30 year fixed so I did a no-cost 3.875% with SGIP. My second time working with him. He also did my purchase loan 9 months ago. Great guy. As usual, I'll be keeping him on speed-dial for any future deals. Also, big thanks to my walking-almanac buddy, Zovall, for giving me impartial & helpful tips on what to look for in a refi. Believe it or not, I'm a newborn baby when it comes to doing a refi. Both men took great care of me. 

 

[rkp]

what is the downside to refi in 9 months or multiple refis in short periods of time?  i have friends who have refi'd 5 years into their loan and while they are saving on their monthly, they tacked on 5 years more to their mortgage payoff date so are they really saving?

 

[usctrojancpa]

what is the downside to refi in 9 months or multiple refis in short periods of time?  i have friends who have refi'd 5 years into their loan and while they are saving on their monthly, they tacked on 5 years more to their mortgage payoff date so are they really saving?

No downside of refi'ing as long as the cost of the previous refi's were covered by the monthly savings.  They can always increase their mortgage payment to what is was before and pay off the home in less than 25 years.  Yeah the loan get's re-set back to 30 years but the interest rate is reduced, you just have to do the math.

 

[usctrojancpa]

The low price leaders for refi's out there seem to be Provident and Amerisave.  There is a price to be paid for their super low rates....you will be probed (you better be a clean borrower) and their service is a hit or miss.  Basically just passing on what some of my previous buyers told me.  A few of them told me that would NEVER use Amerisave for a purchase because they can take their sweet time.

 

[cubiczirconia]

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%.

I didn't even realize that the 3.5% rate was available for a few days in 2010 and 2011.  What would be the best way to get this rate when it hits?  Should I get prequalified now and have my paperwork on file at a lender so they can pull the trigger when the rate bounces down for a day or two?

For starters, take the call when your lender calls, and act immediately SGIP called us, but we didn't act fast enough!

 

[morekaos]

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 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.

That?s correct.
They are attempting to keep rates low by selling the short end and buying the long end, known as Operation Twist.

Someone else got caught holding the bag with that very same strategy.  His name was Robert Citroen

 

[usctrojancpa]

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 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.

That?s correct.
They are attempting to keep rates low by selling the short end and buying the long end, known as Operation Twist.

Someone else got caught holding the bag with that very same strategy.  His name was Robert Citroen

Another saying I live by....DON'T FIGHT THE TAPE!

 

[woodburyowner]

No downside of refi'ing as long as the cost of the previous refi's were covered by the monthly savings.  They can always increase their mortgage payment to what is was before and pay off the home in less than 25 years.  Yeah the loan get's re-set back to 30 years but the interest rate is reduced, you just have to do the math.

This is the absolute key.  Just pay the same amount you were previously paying and you can never go wrong with refi'ing to a lower rate (if it is no cost refi).  If you are 5 years into a mortgage and refi to save .25% and then pay only the new amount, you will definitely be paying more over the course of the loan.

 

[socal78]

what is the downside to refi in 9 months or multiple refis in short periods of time?  i have friends who have refi'd 5 years into their loan and while they are saving on their monthly, they tacked on 5 years more to their mortgage payoff date so are they really saving?

For me, refinancing after a short period of time was a non-issue. In the early stages of the amortization schedule, so little of what you pay is applied towards the principal. So, I was totally comfortable hitting the "Restart" button. Since there is no prepayment penalty, we can pay off however we'd like. It was no cost, so I don't have to find that break-even point for when the loan becomes worth it.

Fwiw, I did consider Provident. Heard pretty good things about them. In our case: we have credit scores in the high 700s, clean credit histories, very healthy DTI ratios, carrying minimal debt, home appraisal came in higher than expected, sufficient equity, etc. We would be good candidates for the type of client that Provident caters to. So, I did not choose to work with the company that I did because we don't qualify for something better or anything like that. I have found good customer service with SGIP and have experienced enough in the past to come to really value that. It's not all about the rate for me. My rate was a bit higher than it probably would have been had I gone to Provident. However, it was okay with me. I was coming down from 4.5% and enjoy working with SGIP, so it's all good with me.

 

[irvinehomeowner]

Man... I remember when 8% was a great rate.

 

[davenlei]

what is the downside to refi in 9 months or multiple refis in short periods of time?  i have friends who have refi'd 5 years into their loan and while they are saving on their monthly, they tacked on 5 years more to their mortgage payoff date so are they really saving?

For me, refinancing after a short period of time was a non-issue. In the early stages of the amortization schedule, so little of what you pay is applied towards the principal. So, I was totally comfortable hitting the "Restart" button. Since there is no prepayment penalty, we can pay off however we'd like. It was no cost, so I don't have to find that break-even point for when the loan becomes worth it.

Fwiw, I did consider Provident. Heard pretty good things about them. In our case: we have credit scores in the high 700s, clean credit histories, very healthy DTI ratios, carrying minimal debt, home appraisal came in higher than expected, sufficient equity, etc. We would be good candidates for the type of client that Provident caters to. So, I did not choose to work with the company that I did because we don't qualify for something better or anything like that. I have found good customer service with SGIP and have experienced enough in the past to come to really value that. It's not all about the rate for me. My rate was a bit higher than it probably would have been had I gone to Provident. However, it was okay with me. I was coming down from 4.5% and enjoy working with SGIP, so it's all good with me.

I totally agree.  Working with SGIP allows me to sleep well at night during a purchase or refi.  I know things will be taken care of and I don't have to worry about any bad surprises that could have been avoided.  I have worked with several Mortgage Brokers in the past and SGIP is the best I have worked with.  He has done my purchase and refi and I am waiting in the wings to refi again if he feels the benefit is there for me.  By the way, I have referred several co-workers to him and the ones that did work with him have all had very similar positive experiences.

 

[rkp]

there are literally no out of pocket fees?  who pays for the appraisal?

 

[socal78]

there are literally no out of pocket fees?  who pays for the appraisal?

Welcome to my world, Rkp!  A few months ago, I said the exact same thing.  That's why I love this site! We can all help each other save monayyyy!

The only risk capital for us was a $300 application fee, which is credited back at closing. I think the paperwork said that (theoretically) that could be used towards the cost of the appraisal if the client walked away at a certain point however I'm not sure how strict they are on that. Maybe SGIP can elaborate.

 

[usctrojancpa]

there are literally no out of pocket fees?  who pays for the appraisal?

It comes down to the cost associated with the rate.  For example, SoCal probably got the rate of 3.875% with a .50% credit.  That credit amount was sufficient to absorb most all or all of the closings costs related with the refi, including the appraisal cost.  No such thing as a FREE refi unless you have a rate that provides a credit high enough to cover the closing costs.

 

[socal78]

Rkp, here is what you really want to know: I wrote 2 checks. One was for the application fee. The second was for next month's pro-rated interest like normal, except that amount was reduced by the amount of the first check. I like no-cost loans because it's easier to make an apples-to-apples comparison when you are shopping.

 

[daedalus]

Just curious, for those who have or are planning to refi, what's the thinking behind going from a non-recourse loan to a recourse loan?  Are you convinced that, no matter what, you'll never be underwater?  Are you financially- or career-secure enough that it isn't an issue?  Do you see it as being worth the risk?  Or do you think recourse defaults will continue to be un-enforced debts?

 

[davenlei]

Just curious, for those who have or are planning to refi, what's the thinking behind going from a non-recourse loan to a recourse loan?  Are you convinced that, no matter what, you'll never be underwater?  Are you financially- or career-secure enough that it isn't an issue?  Do you see it as being worth the risk?  Or do you think recourse defaults will continue to be un-enforced debts?

That did cross my mind when I refi'd but since I have a sizeable equity cushion with the house I am in, it would take a pretty harsh drop to dip me into negative equity.  To get that kind of drop in prop values, either a devastating earthquake would have hit or the economy would have fallen off a cliff much worse than the past few years.  If either of those happened, I think having a recourse loan would be one of the last worries on my mind.