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Time For The Weekly Refinance: 30 Year Fixed Mortgage Hits Record Low At 4.44%
It is time for the weekly refi: the 30 Year Freddie cash mortgage just hit another fresh all time low. And with the 10 Year plunging and soon to drop below 2.5% as the bond bubble is becoming ever more primed, we expect the 30 Year to eventually drop as low as 4% if not further. Will this force more incremental homebuying activity? Absolutely not.
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Free mortgages for everyone!!!
OT: Gold exposure adds lustre to Sprott profits
http://www.financialpost.com/news/Gold+exposure+adds+lustre+Sprott+profi...
I bought my modest "single storey clapboard dwelling" in 1995 for $86,900. It's paid for. Sure I can afford a larger house now, but I'd have to sell my current house. With the barn, fishpond, and other improvements, it's worth $140K now. No way I can sell it in today's market, so here I stay.
Sounds like you got it going on, why move?
Just need a pool now. Pool and a pond. The pond would be good for you. Natural spring?
ZIRP works, only if long rates are stable to falling. Once long rates begin to rise for any reason, crazy coyote looks down and sees nothing but canyon floor.
Trillions of dollars in arbitrage/carry trade will all head for the door at the same time.
If the bulk of folks can refi down to 3.5% your talking tital waves of extra cash coming into the household monthly basis.. could spark the next bull market potentialy.
Yes, and if they have brains, right into the 3 Gs (guns,gold,grub)
i was offered 4.25% this week. i'm at 5 1/8% now and this would save me approx $300a month
if i do it, then all extra cash goes to pay down the wife's student loans
With whom if you dont mind the question? My spouse and I are in the top credit bracket and current mortgage well above water. Not one ding...house hold brings in near 170k and both my credit unions wont break 4.44%. Very frustrating as i`m at 5.625% now. I would save about 400-500 monthly which would promptly be coverted to the barbaric metal.
You might want to look to Pentagon Federal Credit Union. I know that might be a bit scary for those in this forum that have a bunker full of guns and ammo, and have chickens running around their backyard, but they happen to have great rates. They primarily serve Pentagon employees and those in the military, but if you make a $25 donation then you can become a member.
The above post at 4.25% is most likely a 15 year. Pentagon has a 4.375% (4.461% APR) for 30 year, while the 15 year is 3.875% (4.024% APR).
https://www.penfed.org/productsAndRates/mortgages/mortgageRatesListing.asp
I don't work for them, and don't know anything more about their mortgage programs other than their published rate.
Good luck...
plesant valley national bank. 4.25% is a promo they are doing. i'm in NJ, not sure if that matters to them. me and the wife are in the 800 fico range as well
We in the same boat, looking to refi.
Called a few brokers that show up in Bankrate, getting quotes around 4.375.
Buddy said to get one name on the new note if possible... to protect the others credit in case the family financial situation goes south.
It "could". I mean, why rely on fundamentals like true, sustainable, organic economic growth when you can inject another shot of cortisone into the 80 year old running back? Oh, then there is the problem of refi'ing that underwater mortgage. And the delinquents. And no one has a job. And any "savings" goes to deleverage. And the nation is bankrupt. And the... eh, fawk it. Nothing but victorious bulls riding unicorns jumping off into the pot of gold (thanks for the morning selloff Cramer).
I'm about 3 years into a 15-year @ 4.875%. I don't know what the rates would have to fall to for me to consider another refi, since each one has closing costs. My original was 6.25%, so the refi made sense, but it would have to be sub-4% for me to consider doing it again and really just pre-paying is the only route that makes any sense now, but I can't really do that for various reasons. A refi is just pissing money away, too. So I see diminishing returns for refi activity. I did consider making a large pre-payment and then refinancing the remainder into a 30 year which would result in a much lower monthly payment. But it's not like there is any place to invest the extra cash. I could spend it on renovations and needed repairs, but that isn't adding to my assets, it's just pissing money away, too.
I should add that my goal in beocming mortgage free is to downshift to a less stressful job situation and/or change fields. I really don't want to work so much, at least, not in a fucking cubicle.
30 year, huh? Don't know how old you are, but do you really want to worry about paying a mortgage when you're in your 60's or 70's? Keep your 15-year 4.875% and pay it off early. It's very comforting having a paid-off house.
Just thinking out loud. I have no intention of going from a 15 to a 30 unless I suffer another round of pay cuts. My reason for saying that was, if I can get the payments down quite a bit, I have more freedom to maneuver career-wise.
You could do a 7/1 ARM at 3.25 with minimal costs and accfelerate the principal reductions
Go get a no cost 15 year at 3.875, use the savings to pay down principal every month. You will probably turn it into a 10-12 year loan that way.
I don't know about others, but Wells Fargo offered me a no-cost 15 year at 4.3%.
I think that they can sell the new loan to the government at even lower rates, so they'll make their money back.
I don't see how this bodes well for their future earnings, as they're lopping 1.5% off my current rate(my current mortgage is with them as well).
I am doing no cost 15 year loans at 3.875.
This is where Fekete shines when discussing the liquidation value of debt being destroyed in a perpetually falling interest rate environment.
If I refi right now at 4.44, I can decrease my interest rate by 11%, denying some investor (most likely you by proxy) of this previously contracted revenue stream.
By the time this fall to 0% plays out, there are going to be no investors left standing, other than the criminal enterprises known as TBTF GSEs.
Marx would be proud.
We refi'd 6 months ago from 30yr./6.25 to 15yr./4.375. Perfect credit, two incomes, and we had to do a CASH-IN refi to make it happen.
The refi/rate that is "offered" is absolutely meaningless. The refi/rate that gets approved is the only thing that matters.
4 years ago, *everyone* got approved, no questions asked.
Today, only a TINY fraction of mortgage holders/buyers will both qualify and be approved at these low rates. I.e. the rate is meaningless. Approval/qualification is the high hurdle. And great credit + income does NOT guarantee approval - far from it. Per our experience, buyers and refi candidates also need 20%+ down payment + points + cash-in.
Very few potential buyers/refi's have what it takes to get approved at these low rates. Folks who do have these means are already in a home and have their shit in a pile - they are not desperate home buyers.
These low rates mean nothing. There is no demand from the demographic that can actually get approved. Thus, the housing market is phucked, regardless of rates.
Read Buffett's 1999 Fortune article on what distinguishes bull from bear markets and you will conclude, beyond any doubt, that all time record low interest rates represent the beginning of a secular bear market.
Hell, I'm waiting for the 15 year fixed rate mortgage to drop to 3%. And if we have a panic in the stock market, it might just make it there. Call it my wet dream, as in a flood of extremely cheap money.
But I'm not going to let this get away from me either because when the currency crisis comes, and it's coming, interest rates will then go through the roof before it all comes down around us. I would rather be holding a mortgage at 3 or 4% denominated in worthless dollars that one at 5 or 6%.
Who would be holding a mortgage when a couple of silver eagles will pay it off? I keep getting Fedex special deliveries from Citimortgage (would love to clear out from those bozos) begging me to refi at 4.59. Whats up with that.
My only concern if the s**t hits the fan and the US dollar crumbles is as follows.
1) What will replace it.
2) How will "contracts" denominated in the "old" dollar currency be "converted" to the new currency and under what conditions.
While everyone says that it won't and can't happen and it doesn't matter, what does matter are the men with guns at my door trying to enforce "old" dollar denominated contracts. Anyone who thinks this won't happen hasn't studied martial law, desperate men and fascism.
1) What will replace it.
here ya go:
http://www.campaignforliberty.com/article.php?view=1049
The problem here is the need for a very liquid medium of exchange. We are actually moving from a paper money economy to a credit card economy.
If cats and dogs start sleeping together the credit card system would collapse first driving people back to paper money. Any metal based economy would be rampant with fraud because metals are much easier counterfeit than dollar bills.
You and me both, CD.
I refi'd a 6.5/30 to a 4.75/15 a few years ago and have been making extra payments to try to retire it early. I don't want to be in the position of having to owe something other than FRNs in the event of "unforeseen circumstances".
Look no further than the Euro. In Germany, the Euro replaced the DMark at a 2:1 ratio. This was accepted by all including employers, employees and mortgage holders.....until the market decided something else. Over the course of 10 years, the DMark was inflated by almost 100%.
So let's say the FRN's are replaced with say North American Horseshit Notes (NAHSN) at a rate of 3:1. Mortgages, food, gas, salaries etc all adjust fairly at inception. Fair at first but the market can charge what it likes and soon the underlying problem that drove the currency conversion in the first place reveals itself. Your $1500/month mortgage will be reduced to 500 NAHSN's/month but so would your salary. Before you know it, what used to be 30% mortgage affordability becomes 60% once all other expenses' are considered.
In Germany, restaurant menus simply replaced the DM with the Euro sign almost immediately. 100% retail inflation instantaneously.
Rock it, CogD!
I would rather be holding a mortgage at 3 or 4% denominated in worthless dollars than one at 5 or 6%.
Explain yourself. I have a fixed rate mortgage at 5.87%. Now, granted I have been looking at a re-fi to a lower rate. But, if dollars become worthless. I can accumulate cheap dollars and pay off my house. This has worked out really well in the past, when I purchased a house at 7%, but the secret Fed Inflation rate was 15%. The house payment was a huge $444 per month, but at the end of the term of the loan, the house payment was almost the equivalent to a light bill.
So, what you sayin, man?
See my comment above. In a nut shell, when this Ponzi begins to unravel, desperate men will do desperate things. Who really knows how old dollar denominated contracts will be handled or "converted" under a new currency regime. Men with guns at my door trying to enforce old contracts can (and I suspect will) happen for those who say it doesn't matter and ignores the letters in the mailbox.
In a collapse, he who has the guns makes the rules. So as a hedge, I would want old contracts under the most favorable terms before the collapse. Might be better for me, might not be. But I need to think in terms of desperate men trying to collect on old dollar denominated contracts and who have guns and political influence in the "new" world that's coming.
Who do suppose the "men with guns" would be representing? Government agents? Private goons? It just seems to melodramatic. Can you point to a historical case where such a situation took place?
Men with guns, including the official and legal enforcers of law aka the sheriff and police, would be representing the people/institutions/bond holders that "own" my mortgage. And US history is full of examples of "the money interests" using police as collection/eviction agencies. Look no further than the eviction process today.
While admittedly not many people are being forced out of their former homes today because they aren't paying the mortgage, if and when the decision is made to do so, the local sheriff (with his/her gun on his/her hip) will be sent to the homes to remove the squatters.
The "law" is always backed by the threat of violence. And I'm sure that what ever system they come up with for a new currency will be backed by "law", thus the sheriff will come calling to enforce the "law" with his 9 mil SIG.
BTW if the deadbeat house squatter problem becomes too large to handle, I have no doubt private "security" forces will be deputized to help. Xe/Blackwater anyone?
I think squatters will be allowed to stay as renters. Payment will be achieved through unemployment subsidies or IRS garnishes.
I was thinking about this earlier today. The "guys with the guns" will be your neighbors. Did you see the scene in Atlanta (East Point) yesterday over applications for Section 8 housing? Do you see bums on the streets asking for money? If things continue on this path, I believe that it is a matter of time before people start knocking on your door asking for hand outs of food and or money. When did it happen? During the depression. When you say no, do you think they will take your stuff by force? What happened in Atlanta?
They're easy: It would only take a couple of their brain-dead skulls stuck on pikes in my front yard to make them reconsider knocking on my door. It's the government goons you can't do anything about.
And no, I am not kidding around. You want a horror show? I'll give you all the blood and dismembered bodies you can stand.
Good luck with that local SWAT team when they come pounding down your front door.
: ) Thanks! CogD
Can we expect any other mortgage-related give-aways from Barry Soetoro before November?
4.44% is still a hughe return these days if you compare it to stock div's.
With compounding interest amortized yearly and refinanced every 7 years, 4.44% is really closer to 30%. Add fractional reserve lending, and the banks yield is closer to 300% over the same period.
We will all get the Chris Dodd 1% mortgage if we just hold out till next year.
1pc! That's too high, think ZIRP loans, think grand moral hazard and never underestimate the US Government's attempts to keep a good ponzi going.
Still not cheap.. when a 20% RE decline is added in. 24 % real rate. Leverage only works when price goes up.
Sorry to piggy, virgil.
The post below is not a solicitation for business - just bad delivery. In the spirit of transparency, I am offering ZH'ers a "behind the scenes" look at mortgage rates. I definitely want to make it clear I am not selling anything - especially on this site. Information only. Cheers.
The VI would be honored to provide you with mortgage rates, before commissions (read: base pricing) as a thank you for all ZH and its contributors have provided me. Mortgage Industry for 24 years. Anyway, here you go -
15 year fixed: 3.625% at .5% cost, before commission. 3.75% at a (1.75%) rebate from lender.
These approximate quotes represent what a broker/banker is getting his/her rate/fee structure at when they are speaking with you, today.
This quote was based on a LTV of 75%, credit score of 721, loan amount not to exceed conforming limits for your area.
A fair commission by most reputable broker/bankers would be 1%. In the case of the rebate pricing, that would mean 0 points to you, with the balance of the rebate being applied towards your closing costs.
EDIT: base pricing represents a pass through to loan officer from company. Expect that there is another .25-.50 bps built in for company profit. Feel free to run any quote by me. Let's keep 'em honest. And this is NOT a solicitation for business.
A quick pass at 30 year fixed rates, same criteria, shows 4% at par. "Par" means that loan officer cost is zero. So what are you being quoted for a 30 year fixed at 4%, today? If it's costing more than 1 point, you might consider asking your loan officer to sharper proverbial pencil.
Again, NOT a solicitation for business. I am providing this information as a professional courtesy, only.
How about a 30 yr fixed refi, 20% underwater and currently with PMI?
Sorry my friend, nothing is ringing a bell. For those who are willing to play a game of poker, however, holding back on a mortgage payment will bring some lenders to the bargaining table. It has to feel like an "all in" play - "we work something out, or else." The downside - a ding on your credit.
Another option is to hire an attorney to review your loan documents for errors and omissions - assuming they weren't yours. I know of some borrowers who were able to get their lender to negotiate better terms because of improper disclosure on the lenders part.
Bottom line - unless you qualify for one of the various,and in some cases usurious, government sponsored programs, you will have to make like a maniac to get attention.
Funny you say that. I put a stop payment on my mortgage check today. Should here something in a couple of weeks.
You're in the drivers seat now
The money is cheap but the 'asset' is now a liability, it always was but the constant rising price made it acceptable . Pass.
Buy now or be priced out forever!
Wait to buy, because tomorrow it will be cheaper.
Get those mortgages soon. The days of record low interest rates may be nearing an end.
Look at the action today in gold, silver, platinum, palladium, copper, etc. Paper is being traded for a variety of metals regardless of their position on the periodic table. The rush is not to treasuries.
Maybe we will get a surprise today when the 30-year auction results come out...hmmmmmm
Of course the surprise will likely be a record bid-to-cover ratio.
'Cuz you know, everybody wants a piece of the action!
Long term bond rates in Canada:
http://www.bankofcanada.ca/en/rates/bonds.html
Fixed mortgage rates double long term rates:
http://www.tdcanadatrust.com/mortgages/numbers.jsp
I would rather pay more interest on a much cheaper house than vice versa
Dude, commercial real estate is going to crush the banks. Residential is killing them right now.
how many homeowners have at least 20% equity and a 720 fico score and legit income that is 3x the monthly mortgage/taxes? just wondering if anyone knows that stat?
The difference between indentured servants and slaves? Unlike slaves, servants could look forward to release from bondage. Seems to me that the period of our indenture has been extended beyond our lifetimes, thanks to our 'leaders' bailing out the nonproductive bloodsuckers who are too big to fail. And exactly why were they too big to fail? Is it better that we fail? Apparently so, for we are only slaves.
Yeah these days that threshhold between slave and servant is just some future date on the calendar. If within your life expectancy, servant; if not, slave.
Corporate Feudalism.
Still wondering if Obama will order Fannie and Freddie "once more unto the breach" and drive rates on conforming 30 years down to 4% (or less). This morning's initial claims data would seem to push him in that direction. What other levers does he have left, and why hasn't he used them already? Maybe he's happy to let Nancy and Harry go down if it helps his electability in 2012. The world wonders...
DOW and SP500 bearish megaphone wedge charts continue ...
http://stockmarket618.wordpress.com
"And with the 10 Year plunging and soon to drop below 2.5% as the bond bubble is becoming ever more primed, we expect the 30 Year to eventually drop as low as 4% if not further."
Really? How much confidence would you guys have in this scenario?
I'm looking at a 30y fixed at 4.5%. 5% down.
...and they can't even steal from customers to compensate for the pancaking yield curve. What's a banker to do?
http://online.wsj.com/article/SB10001424052748703435104575421990031807222.html