Hmmm, government forces rates down so more people will refinance, moving them from non-recourse to recourse loans. That way, when the economy collapses next spring the banks will have a tighter grip on collateral and borrowers future income.

If there is any chance you’ll lose your job in a severe economic downturn, and you still have your original purchase financing in place, don’t take this deal. Life isn’t always what you think..
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Can S-crow or some other person that sees the latest loan doc details confirm this???? thanks -or do you not want to answer this?

Here’s a great summary of the future, easy to understand even if you’re not a numbers person:

http://www.tickerforum.org/cgi-ticker/akcs-www?post=73060

I’ve worked in commercial development but am a little ignorant on the residential side and have never owned a home.

Patience has served people well in many things in life. But, I understand your frustration. Always keep looking and it sounds like you are. Maybe something will pop up that will hit home for you.

jon // Nov 25, 2008 at 8:01 pm

Anyway, this dip in rates hopefully means that the Alt-A wave that is coming in 2010 won’t amount to much.

Perhaps the “plain vanilla ARMs”. I doubt it will help anybody that went for a $1600/mo $600k negatively-amortizing mortgage where the borrower was “qualified” at the $1600/mo teaser payment. Especially if that person went stated income and “fudged” it upwards.

Plenty of those out there.

Plenty.

It seems that way to me as well. When I got my loan a couple of years ago I beat the hell out of the numbers and spent time thoroughly going through the various options. Any way I looked at it buying down the mortgage just did not seem to make sense unless you really really knew you were going to be in the loan for 13-15 years and even then the payout versus modest investment returns could well push the break-even years further, if ever. Granted my credit score was high and I assume I wasn’t starting from some high rate without buys downs and maybe that’s the difference???

You guys beat up a lot of things about buying why not spend some time on buy downs, mortgage insurance, percentage down etc. I think it would be very useful for many here. I went through five pitches and the one I chose was the third one hauled out by the bank I picked and I had to grind for everything. None of the loan officers were of any meaningful help on any of this as far as I was concerned as the info they offered seem to have too much of a self serving feeling about it.

However, I think a lot of people probably ask themselves…

1) Can I make do with saving some mortgage coin (refi) with the possibility of further price deterioration (call me in tens years crowd) or,

2) Do I stand idle, do nothing and my revolving credit, plus the around-the-corner- adjusting ARM reset places me further under the eight-ball.

3) I have the ability to buy, have good credit, and have found a place to buy that meets all my needs AND the interest rates are super AND I’m buying with no competition AND the house price has already fallen to 2004 levels.

The caveat for all this is that for a lot of people this is not an interest rate problem as much as it is a LTV problem. If they are over encumbered, then they are out of luck. Unfortunately, a lot of people are in a pickle and can’t refi, no matter what. But for those that can, they will.

Yes, rates are dropping (and will likely get much lower still), but that will be cold comfort to anyone holding assets that keep depreciating. It doesn’t help much that you can get a 30 year fixed mortgage for 4% if your home is losing 10% of market value per annum.

Still got low mortgage rates. Used a mortgage broker this past February (and way long ago), but got the ING mortgage direct through them.

You gotta be on the ball, though, and have a good loan servicer.

Before that I had a 3.99% 5/1 ARM (through ING) (would have reset this October). So, couple of strings of luck, honestly.

Thanks for the feedback and to those that have dropped me a note for lending resources. To those that I have yet to get back to, please be patient, it may not be until tomorrow morning. And, remember, I’m not a lender or loan officer.

I hope that some can take advantage of this opportunity to lock in these rates. I’m reading blogs and news that in some areas of the country rates even dipped to 4.875%. This is just remarkable to see for a 30 yr fixed. If it stays at this level, we are going to see people refinance and/or take advantage of some vintage 2003-2004 housing prices out there. If housing prices drop further in the months to come coupled with incredible rates, well, I can’t control what people do, but you will see buying activity.

My intent is always consumer driven. I don’t care who you get financing through, nor who you close your transactions with (sort of). If you can get a good deal, let people know that you learned of the information via Seattle Bubble.

Sensibly buying, selling and financing is my objective with the quick hit posts I do from time to time. It is what creates stable markets for everyone’s benefit.

S-Crow

Anyway, this dip in rates hopefully means that the Alt-A wave that is coming in 2010 won’t amount to much. By six months the foreclosures because of sub-prime resets will be way down. Then problem the will be paying for the bailout binge.

If there is any chance you’ll lose your job in a severe economic downturn, and you still have your original purchase financing in place, don’t take this deal. Life isn’t always what you think..

The current effective interest rate for a 30-year mortgage 6.07% not 5.25% or 5.125%. Don’t be a fool. You are always better off to pay a higher effective rate rather than buy down a mortgage.

For people who have ARMs or anything similar, this is a good heads up to start looking at fixed options.