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

Zillow Mortgage Marketplace is a "junk news" peddler but if you input some of the pricing issues we see including:

Condo
Cash Out
Non-Owner
700 FICO

You'll see most brokers priced at 6.0%. Bank of The West's website has a 5.875% rate, as do others when priced with the same parameters. If owner occupied, but FICO below 700, you're mid 5's easy.

My .02c
 
I'm currently at a crossroad to either take a 4% 10/1 ARM or 4.75% 30 fixed. Both loans have float down options prior to closing. Rates are lower but I'm "paying" 0.25% on the rate to get a 6 month lock.
 
Mety said:
There are still 3%ers ARM loans if you look hard...
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Without a doubt. I can see wholesale broker rates. This is a pretty good rate through builder's lender and they are offering credit back. I can certainly get < 4% ARM but not with a 6 month lock.
 
Cares said:
I'm currently at a crossroad to either take a 4% 10/1 ARM or 4.75% 30 fixed. Both loans have float down options prior to closing. Rates are lower but I'm "paying" 0.25% on the rate to get a 6 month lock.
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Go with the 10 year. I have a 5/1 arm @ 2.75% (2/2/5) that resets midway through 2021. I figure in the next three years there will be something that allows me to refinance into something close to that 2.75%.
 
qwerty said:
Cares said:
I'm currently at a crossroad to either take a 4% 10/1 ARM or 4.75% 30 fixed. Both loans have float down options prior to closing. Rates are lower but I'm "paying" 0.25% on the rate to get a 6 month lock.
Click to expand...

Go with the 10 year. I have a 5/1 arm @ 2.75% (2/2/5) that resets midway through 2021. I figure in the next three years there will be something that allows me to refinance into something close to that 2.75%.
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I agree. Lower the better. Especially if you buy in Irvine, you will most likely move again in less than 10 years. Even if you don't move, you can always refi with lower rates so that the monthly cost will remain lower. I think 4.75 is a little too high in my opinion.
 
Most long term locks preserve the entire rate sheet.... at least we do. You can lock the 30 fixed, but take the 10/1 or something shorter if you prefer. Pricing is based on the time of lock. I'd ask if the .25 locks the rate sheet or not. If you have to make a commitment, I'd take the 10/1.

My .02c
 
Cares said:
I'm currently at a crossroad to either take a 4% 10/1 ARM or 4.75% 30 fixed. Both loans have float down options prior to closing. Rates are lower but I'm "paying" 0.25% on the rate to get a 6 month lock.
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Go with the fixed. You will thank me someday.
 
eyephone said:
Cares said:
I'm currently at a crossroad to either take a 4% 10/1 ARM or 4.75% 30 fixed. Both loans have float down options prior to closing. Rates are lower but I'm "paying" 0.25% on the rate to get a 6 month lock.
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Go with the fixed. You will thank me someday.
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I used to think like that till TI changed my mind. The only one thanking me would have been the bank since I would have been paying interest at 3.75%. The breakeven was like 12-13 years can?t remember.
 
The new tax laws also make the higher interest rate harder to swallow. Before I could deduct 2.75 interest rate and effectively pay 1.54%. Now I essentially have to make a 5% return before taxes to cover my 2.75% interest rate. So definitely less incentive to pay interest.
 
qwerty said:
The new tax laws also make the higher interest rate harder to swallow. Before I could deduct 2.75 interest rate and effectively pay 1.54%. Now I essentially have to make a 5% return before taxes to cover my 2.75% interest rate. So definitely less incentive to pay interest.
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Time to pay off your mortgage. Have a DEED BURNING PARTEY!!!
 
fortune11 said:
Compressed-Village said:
fortune11 said:
Soylent Green Is People said:
One has to wonder with 30 fixed likely to have 4.x rates seen only in a rear view mirror, and ARM rates eventually creeping above 4.5%, if a heavy brake will be applied to home sales based on psychology or affordability.

I've heard it before when rates were in the 3's moving to 4's that "I don't deserve a rate in the 4's!!" as a market rate would cause social discomfort at the weekend gatherings when people compare the rate they got to others. Still there are others looking at high rent now becoming competitive with high house payments and saying "meh, do I really need to own now?"

These are interesting times indeed.
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Agree

Higher rates also affect the move up buyer locked into rates from say 3 or 4 years ago

I was at a conference last month in New York where a panel of economists and home builder experts were touting continued expanded cycle of housing starts to 1.4mm in the next 3 years but those charts and data don?t take into account this human behavioral bias

FWIW , I think the Fed is Locked And loaded now into a hike in December and 3-4 next year unless the equity market calls their bluff by selling off and by that I mean atleast 10 percent (where current fed chairs pain threshold is I guess) . This means mid to high 5 percent mortgages are not inconceivable => we start to see more arm product or looser standards to keep the party going ...
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The 10% sell off is reasonable when all assets will be re-priced in 2019.
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To be clear , I am not saying equities will sell off 10 percent

Just that that?s the type of market pain that will cause the fed to restrike their put and acknowledge tightening financial conditions .

Will they sell off 10 percent - I don?t know , is the honest answer . What I do know is companies across the board are feeling the heat on margins

And top line growth has to overcome some really tough comparisons versus the stellar 2018
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Market rightly selling off

I still stand behind my call ? it will take close to  10 percent correction for the fed under Powell to blink

We are not there yet , barely 3 percent down move so far
 
qwerty said:
The new tax laws also make the higher interest rate harder to swallow. Before I could deduct 2.75 interest rate and effectively pay 1.54%. Now I essentially have to make a 5% return before taxes to cover my 2.75% interest rate. So definitely less incentive to pay interest.
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So your loan is less than about $500K and you live in a house worth more than a million.  I am jealous
 
I've always gone for the lowest rate I could get... don't be afraid of the ARM.

However, if you can afford a higher fixed rate, then you need to consider other factors to determine what is best for you (forever home, employment situation may change to not allow a future refi, etc).
 
The boat has sailed on the low fixed rate.

I can care less and don?t have to worry about the interest rate. (Since I have a low rate)


I guess you can hope for a receission and hope for a low rate. Idk

Good luck and God bless.  :D
 
Irvine Dream said:
qwerty said:
The new tax laws also make the higher interest rate harder to swallow. Before I could deduct 2.75 interest rate and effectively pay 1.54%. Now I essentially have to make a 5% return before taxes to cover my 2.75% interest rate. So definitely less incentive to pay interest.
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So your loan is less than about $500K and you live in a house worth more than a million.  I am jealous
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Yes sir, I am a member of the < 50% LTV club.
 
Depends on the FCB transaction. Some FCB's rent their properties. Others have held their homes off of the rental market, putting a further squeeze on inventory - sale and rental opportunities. Bigly number of 100% never rented "see through" homes in newer communities. More than there really should be for a healthy market.

I've been of the belief for some time that the low rates of 2012-2017 were eventually going to freeze up real estate sales - ideas that fall into two categories:

a) "Why should I move to a larger home at a 5x rate when I can afford the 3.x rate I've got now?"

And with the resulting squeezed inventory:

2) "Nothing for sale pencils out as a good cash flowing rental"

Adding to this are the coming 2018 tax filing surprises, the inevitable "blue wave" changing government policies, and (my belief) that Prop 10 will pass squashing rental property markets. The end result: either rates or prices will need to deflate soon or the next 5-7 years are going to get very interesting indeed.

My .02c
 
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