Mortgage Rates Are Up So Now What? *UPDATE 09-18-2013* (Fed kicks can down curb)

[huntingsocal]

See post #34 for update 9-18-2013

The Fed has been keeping mortgage rates artificially low going on two years now and the cookie jar is just about empty.

The writing is on the wall in the form of the "minutes" recently released from the last Fed meeting, where even just talk about when to stop buying mortgage backed securities (to keep rates low) made rates spike on the news.

Good news is you can still get a mortgage at "pre-panic" prices right now, well under 4% as I write this.

You can be sure they will go up and quite possibly go up fast. The only question is how soon. Unfortunately my crystal ball is in the shop right now so I can't tell you the answer but my gut tells me it will be sooner rather than later and will catch many by surprise at how quickly it happens when it does.

If you'd like a no B.S. no "pitch" opinion about whether or not you can save some money right now on your mortgage PM me with your loan amount, your current payment/interest rate, your estimated home value and your estimated credit score. I don't need to get all your financials or run your credit just to give you an idea if it might be worth it or not. That is what the sales guys do to get you roped in to working with them.

If it looks like it makes sense and you can save some money we can go from there.

I'm relatively new here to calguns but I'm sure if you get in touch with some of the guys I've done business with lately they can tell you I'm a straight shooter.

Who knows, maybe I can help you save a couple hundred bucks a month and you can spend that money on ammo when it comes back in stock.

Micah Peterson
www.lifesourcemortgage.com
BRE 01366504
NMLS 361312

[huntingsocal]

The trend continues, rates slowly creeping up.

Good news is there's still lots of opportunity out there with current loan programs available even for houses "under water"

If you'd like to get an idea of your homes current value here is a link to a free home value estimation.

FREE Home Value Estimation

This link is my own personal link and there's no private info required on your part, you don't need to sign up for any sort of mailing list or fork over your email or anything like that. You won't get spammed for using it.

The estimate is calculated using software from First American Corelogic. Think of it as www.zillow.com on steroids.

Of course, it doesn't take the place of an actual appraisal but it might give you a ball park idea anyway.

If you'd like a more detailed analysis you can always PM

[huntingsocal]

Had to laugh at the headline today on CNBC http://www.cnbc.com/id/100420382 but a good point is being made.

Rates are on their way up but still VERY low.

Mortgage Banker's association shows average 3.67% on 30 year fixed

See first post in the thread for a quick and easy way to find out if it makes sense to grab a low rate before they are gone.

Micah Peterson, Broker
www.LifesourceMortgage.com
DRE 01366504
NMLS 361312

[huntingsocal]

As economies of the world look like they are slowing down we keep getting better news for mortgage rates.

It is the gift that keeps on giving, seems counter intuitive but bad news for the economy = good news for rates.

PM me for more info and I'll let you know what the possibilities might be for your specific scenario.

Currently rates as low as 3.375% APR with no points. Even lower for FHA and VA loans.

They're low now, could go lower but there's now way this can last forever.

Best advice is to take advantage while you can. I don't know when rates will go up but when they do it will happen fast.

[el tardo]

can you say bull****? no one is out there to buy or has the credit or the down to buy thats why the housing market hasnt moved in yrs!! rates wont go up til you have lots of buyers.
now stop lying

[Casual_Shooter]

Originally Posted by el tardo

can you say bull****? no one is out there to buy or has the credit or the down to buy thats why the housing market hasnt moved in yrs!! rates wont go up til you have lots of buyers.
now stop lying

Houses are being sold easily. Multiple offers, some more than the listing price. Cash buyers are king.

[importriders]

Originally Posted by el tardo

can you say bull****? no one is out there to buy or has the credit or the down to buy thats why the housing market hasnt moved in yrs!! rates wont go up til you have lots of buyers.
now stop lying

Yup not sure what market you are in but they are selling down here in San Diego.

[desertexplore]

Looks like an issue again in Sacramento-

[ervaztec]

The fed will do everything they can to keep rates low indefinitely. Because when they do go up we will be crushed by the interest payments on our debt. Low rates are already causing housing prices to spike setting up what will be the nastiest bubble ever seen. I don't see rates going up anytime soon. But I do see us testing all time lows before this summer.

[Baboosh]

Bought my new house in 2010 at 5%, refinanced in 2012 4.2% and refinanced again this year at 3.56%.

[huntingsocal]

Originally Posted by ervaztec

The fed will do everything they can to keep rates low indefinitely. Because when they do go up we will be crushed by the interest payments on our debt. Low rates are already causing housing prices to spike setting up what will be the nastiest bubble ever seen. I don't see rates going up anytime soon. But I do see us testing all time lows before this summer.

Agree ^

Don't shoot the messenger folks, just saying A.) rates are low right now, B.) they will go up eventually and C.) when they do it will be hard and fast IMO.

And that is all it is, my opinion. As far as rates being uber low right now, that is a fact. There is a point where the Fed won't be able to keep rates low and that is when the rest of the world calls B.S. on our ability to repay, look no further than the cluster right now with Italy, Spain, Portugal et. al their bond prices have soared. Germany Bunds and US Treasuries are the current "safe haven" how long that will last is anybody's guess.


@ el tardo: I can only speak for so cal market that I work in and with recent experience in L.A., O.C., Riverside and San Bernardino I can tell you that there are no shortage of buyers with plenty of money and good credit. So many in fact that it makes it hard for people with a lower down payment and maybe good but not perfect credit to even get an offer accepted on a house. No lies, just reporting from the field.

My advice, if you've got a mortgage over 3.5% get a few quotes and see if it pencils out.

[glockman19]

Originally Posted by ervaztec

The fed will do everything they can to keep rates low indefinitely. Because when they do go up we will be crushed by the interest payments on our debt. Low rates are already causing housing prices to spike setting up what will be the nastiest bubble ever seen. I don't see rates going up anytime soon. But I do see us testing all time lows before this summer.

I agree...rates aren't going up anytime soon...and when they do they will still be on the historically low side, nothing like 1980.

And YES, Once rates go up they go up on debt of the government too so they will keep them low through the end of 2014 and into the first Q 2015.

[huntingsocal]

seems we were just talking about this yesterday

smoke em if you got em folks....low rates that is

http://www.usatoday.com/story/money/...lysis/2131135/

"Good news for the economy, however, is bad news for bonds. Bonds are IOUs, and as the economy improves, demand for loans increases, and interest rates rise. Rising rates, in turn, drive down the price of bonds.

In recent days, the yield on benchmark U.S. Treasury notes hit a 2013 low of 1.62%. The yield, which moves opposite to the price, hit 1.73% Friday morning as investors jumped into stocks and out of bonds.

The report also means that the Federal Reserve may not increase its program of purchasing bonds to stimulate the economy, as was speculated before the report. "This keeps the Fed in a status quo position," Hamrich says."

[huntingsocal]

Just sayin, anyone waiting for rates to get lower might be disappointed

Mortgage rates rise for second straight week

http://www.usatoday.com/story/money/...fixed/2165765/

Refi's still looking good if you're over 4%

Don't be late, get that rate

[huntingsocal]

As suspected in my earlier posts, rates went up. Pushing 4% now, still "historically" low in the grand scheme of things but 4% just doesn't sound as nice as 3.5% does it?

Tomorrow has the potential to be a big day for rates with the employment report coming out.

If it sucks, you might have a chance at rates in the 3's again

If it meets or beats expectations (175,000 new jobs) then we can likely kiss the 3's good bye and 4's might not even last long

Mortgage rates right now are like a train departure. If you missed the 3:25pm train and you can still get tickets for the 4pm train then you might want to buy your ticket now before you end up on standby for the 6pm train.

Hint: replace pm with % for the hidden message

PM me your particulars noted above and lets see which train you can get on!

[bbguns44]

Rates are going to be low for at least 2 more years. This recovery is so slow
and so vulnerable to hiccups, the Feds can't raise rates.

[macey109]

but the market can....... look at etf outflows and the amount of debt that has to be placed. Rates are currently oversold but don't kid yourself they will go up. Spreads will widen.

[jdben92883]

Borrowers that were on the fence in May @ 3.75% are soiling their britches at today's rates knocking on the door of 5%.

[jlemond]

Just closed this week at 4.875%. Won my bid at $8800 over market value after loosing more than a dozen bids ranging from $5K to $50K over Market Value. All this in the $200K - $300K Town Home, Condo, PUD market of Los Angeles. Rates rose from 3.5% early/mid June to my Locked and Closed rate of 4.875% early July on 10% down with top tier credit.

[w55]

After recoverying from messy financial mess was happy to be able refi at 3.75 no cost loan...rates seem to be going up

[huntingsocal]

Well, as stated in my original post back at the beginning of the year, higher rates are now a reality but good news is, rates are still good as of this post:

Conventional Loan: 4.5% APR*

FHA Loan: 4% APR*

VA Loan: 4% APR*

(*assumes 80% LTV, 740 FICO, Single Family House)

Here's a chart showing the activity of Fannie Mae mortgage backed securities (the trading of which determines the rates we pay) since my OP and a few key events outlined that had a pretty big impact on rates. Red = higher rates, Green = lower rates

A.) May 3rd, jobs report comes out after Bernanke "hints" that he may take away the punch bowl

B.) Bernanke comes out and puts his foot in his mouth saying he WILL take the punch bowl away later this year and have it completely off the table by mid 2014

C.) July 5th first jobs report comes out after Bernanke sets timeline and again the market tanks, rates go up.

Once again, the Fed has reiterated that they will begin "tapering" this year and into next year depending on economic news as it comes out and once again we've got a jobs report coming out this Friday. (they come out first Friday of every month) If it meets or beats expectations you can expect rates to go up. If it sucks then we'll probably see rates hold or come down some. They jump up will likely be bigger than the step down IMO.

Sounds like several of you were able to catch sub 4% rates which is awesome, probably something you'll be telling your grand kids about

For those of you looking to buy or refi, 4.5% is nothing to sneeze at, just ask your grandparents.

PM for a no cost, no obligation evaluation of your specific scenario and I'll take a look and see how things stack up for you.

[evoevo]

Originally Posted by el tardo

can you say bull****? no one is out there to buy or has the credit or the down to buy thats why the housing market hasnt moved in yrs!! rates wont go up til you have lots of buyers.
now stop lying

Lmao! This guy made me laugh. Someone clearly needs to get their facts straight. Lol

[Darklyte27]

i live in a new community, houses have been selling, the builders have been building the last 4-5 months.

[huntingsocal]

^ seeing the same thing in SoCal. maybe a slight slow down in the pace now that rates have jumped but homes are definitely moving.

[Edvil91]

All speculation! When interest rates rise, home prices will crash. Home prices today are way overvalued because of easy borrowing... We need higher rates! Everyone who bought homes these last 10 years thought they would be millionaires because of how fast prices were going up. All these people will soon be under water with debt.

[Darklyte27]

I didnt think i would be a millionaire unless i won the lotto.
Our home is just slightly what we paid for it.

[American Samurai]

Just got informed by the mortgage company that I interviewed with not too long ago now has a hiring freeze due to the rates that will be going up.

[American Samurai]

Que sera sera I guess. *sigh

[DannyInSoCal]

We laid off 120 employees due to rates backing up.

We're forecasting $600M in fundings this month -

As opposed to $1.2B in JUN / $940M in JUL....


The BarryHabib cut & paste updates are a nice touch though.....

[American Samurai]

Oy vey

[American Samurai]

I thought they weren't going to jack up rates until we had a "real housing recovery"?

[huntingsocal]

Well I'd say it is official now, rates are up so now what?

We've got the Fed this month on the 18th letting us know if they will start to "taper" their bond buying, a.k.a. artificially keeping rates low, which could cause rates to increase further but again, in the grand scheme of things you're still in pretty good shape if you're looking for financing right now IMO

Rates currently sitting at:

4.75% APR Conventional Financing

4.25% APR FHA Financing

4.25% APR VA Financing

(assumes $417,000 loan amount or less, 80% LTV or less and 740 FICO)

For the detail oriented among us here is an updated graph on what rates have been doing since my OP



So where is the opportunity now?

Well, of course if you rates is over 5% then there is still a chance to catch some savings with a refi before the boat leaves the doc.

Another benefit that I've helped some people with is dumping your MI or your FHA loan for a loan without any monthly mortgage insurance.

As Evil pointed out above, one of the results of lower rates has been a run up in house prices. For some who bought with a low down payment, you might have enough equity to get out of your FHA loan or dump your PMI

You can PM me with your address and I can provide you with an estimate of your current value to see where you are at. Of course, it wouldn't take the place of an actual appraisal but at least something a little better than zillow.

What about buying or selling?

If you ask your typical real estate salesperson that question you'll probably hear something like "it's always a good time to buy or sell!" through the stench of their commission breath.

The truth is, every situation is different and there is no way to tell without sitting down and really crunching the numbers and putting those up next to your long term and short term goals.

Rates are still good so maybe it is a good time to buy.

Values are still up so maybe it is a good time to sell.

If you'd rather talk it over with a consultant, like me, who will hash out all the details before giving you a generic answer that serves my interest instead of yours, shoot me a PM and I'll do my best to help you figure out what your next best move is, even if that means just staying put!

Micah Peterson, Broker
DRE 01366504
NMLS 361312

[huntingsocal]

The Fed has kicked the can down the curb for at least another month continuing their $85,000,000,000 a month bond buying at "full blast"

http://money.cnn.com/2013/09/18/news....html?iid=Lead

Expect a knee-jerk reaction of euphoria in the markets over the next few days and use it to lock in a low rate before the dust settles and people start talking about if they'll back off the juice next month instead.

PM me if you need to refinance or if you might need a purchase loan soon because now would be a good time to see what your options before they do start backing off.

Micah Peterson, Broker
BRE 01366504
NMLS 361312