Posted by Sally (WA) on November 28, 2001 at 19:16:57:
Sorry, I wasn’t clear. I was not referring to an owner carry back, I was referring to lender programs where they create both a first and second note on the property totalling 90% rather than a single 90% note which would require the PMI. Breaking it into two pieces side-steps the PMI since the first is only 80% LTV.
Opinio Poll - Interest Rates Going Down? - Posted by Travis (Dallas)
Posted by Travis (Dallas) on November 27, 2001 at 15:03:41:
Even though I know no one knows…I’d like your opinion.
I need to lock in the mortgage rate on the purchase of a new house using FHA 30 Yr.Owner/occ. financing within the next week.
Rates are about 7% with zero points and 6 7/8 at 1/4 pt. for owner occuppied 30 yr.FHA.
Do you think the rates will go down in the next 7 days, or continue to rise??? Anybody want to venture a guess?
Re: Opinio Poll - Interest Rates Going Down? - Posted by Dave T
Posted by Dave T on November 27, 2001 at 22:30:55:
Rather than hoping for a quarter point rate drop, why not consider conventional financing instead of an FHA loan?
While I am not an expert on FHA financing, I understand that FHA loans require mortgage insurance – for the life of the loan. Even if you have a large downpayment, you can not avoid the mortgage insurance for the life of the loan.
If you have to have a low downpayment mortgage, why not look for conventional financing at 95% LTV. Even though you will still have PMI required, lenders will (usually) waive the PMI when the loan amount drops to less than 80% of the value of the property. Not so with FHA loans. After a couple of years, appreciation in the property value alone could give you that 80% LTV ratio you need to request waiver of PMI.
The amount you save by not making a mortgage insurance program payment might be at least equal to the same FHA loan with a quarter point drop in the FHA loan rate.
Re: Opinio Poll - Interest Rates Going Down? - Posted by Donna
Posted by Donna on November 27, 2001 at 19:06:48:
From what we as FHA lenders see on our rate lines, the rates are rising and have been rising for the past week plus.
Interest Rates Going Down will go down Q1 - Posted by Diane (CA)
Posted by Diane (CA) on November 27, 2001 at 18:54:05:
What I’ve observed:
-everyone in my department at work has a refi in process.
-Rates have spiked in the last two weeks.
Those two things indicate to me that the lenders know demand when they see it and they’re cashing in while they can. Q1 is traditionally a slow time in mortgage lending, PLUS, stock market sell-offs in January are not unheard of. My guess is rates will come down again in January as the refi pipelines dry up.
I wish they would go down… - Posted by David Krulac
Posted by David Krulac on November 27, 2001 at 18:31:09:
as I am also waiting to lock in. I never float, but this time I’m floating and hating every minute of it.
Good luck to us all. My crystal ball is broken and the maintenance man is vacationing on St. Vincent!
Re: Opinio Poll - Interest Rates Going Down? - Posted by Sally (WA)
Posted by Sally (WA) on November 27, 2001 at 17:42:50:
I’ll take a SWAG (Stupid Wild AS$ Guess). Lower consumer confidence = lower interest rates as the 10 year treasuries fluctuate according to the confidence level. I heard this morning that the latest consumer confidence numbers were not too good, so I predict a tenth of a point drop on Thursday.
I would not however, be willing to put any money on it.
Re: Opinio Poll - Interest Rates Going Down? - Posted by Mark (WV)
Posted by Mark (WV) on November 27, 2001 at 16:16:02:
well, In this area rates are going up and have been for the last 2 weeks. I think this is being caused by supply and demand, so many people are refi., the morgage and note people are swamped with apps. it was taking 3 days to close with one I deal with about amonth ago now takes around 15-20 days and they won’t come down on rates any,when I tried cryin on the sholder I was told take it or leave it we have plenty more people wanting loans to choose from.
I’ve been playing this game since May… - Posted by Ben (NJ)
Posted by Ben (NJ) on November 27, 2001 at 16:04:39:
and last week I couldn’t take it anymore. I locked in a big portion of a large credit line for two years at 5%. I also left a big portion to float at a lower rate so I still get the benefit if rates go any lower although I think we are at rock bottom. Just my opinion, I could be wrong.
Re: Opinio Poll - Interest Rates Going Down? - Posted by Jim Locker
Posted by Jim Locker on November 27, 2001 at 15:18:46:
Over the next seven days???
On a larger time frame, I think rates have just about bottomed or might go no more than maybe 1/2 point lower. Over the next 7 days is a much more difficult call. I actually would expect a correction in the stock market (which has been moving solidly up for a while now) and when that happens, most likely bond prices will pop, which will cause rates to drop.
So, if I had to guess on that short a timeframe (and sometimes I daytrade/short term trade, so I often do make such guesses) I would say that rates are more likely to drop in the next week than they are to rise.
Re: Opinio Poll - Interest Rates Going Down? - Posted by Sally (WA)
Posted by Sally (WA) on November 28, 2001 at 09:49:45:
If you are going conventional and have 10%, why not go for a 80/10/10 with buyer putting 10% down and the lender creating an 80% first note and 10% second note, thus eliminating the need for PMI. The second note interest rate will be higher, but it will still be less than paying PMI in most cases.
Re: Interest Rates Going Down will go down Q1 - Posted by David Krulac
Posted by David Krulac on November 28, 2001 at 17:45:37:
and there are stock sell offs in Q4 for tax purposes too.
Re: Opinio Poll - Interest Rates Going Down? - Posted by Dave T
Posted by Dave T on November 28, 2001 at 15:09:45:
Certainly an option with a resale. Travis said this is a new house, which I interpreted to mean new construction. In this case, builders usually don’t carry back financing, so it seemed that his options were limited to new financing for the full purchase price.