30 yr fixed around 5%

Our resources tell us phones are ringing off the hook. 

I’m hearing rates for purchases and refi’s are anywhere from 5.25% to 5.125% at par. Earlier this year, I sent out an APB for people who are waiting for super rates.  Here they are again.  Let me know off-line if you would like a reference to loan officers who can give you a good faith estimate and get the ball rolling.

S-Crow

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About S-Crow

"S-Crow" (Tim Kane) is co-owner (with spouse Lynlee, LPO-Designated escrow Officer) of Legacy Escrow Service, Inc., an authentic independent escrow firm closing residential purchase/sale and refinance transactions.

30 comments:

  1. 1
    Jonny says:

    That’s cool. But it’s still an awesome loan to buy an asset that is going to depreciate significantly for the foreseeable future.

  2. 2
    hdizzle says:

    Yeah, but it’s not bad if you have been waiting to refinance

  3. 3
    Flotown says:

    I’d think that grabbing a good rate IN A PLACE THAT HAS ALREADY DEPRECIATED at this point in time would be a good idea, given the risk of the long-end of the yield curve flying off with all these bailouts.

  4. 4
    Flotown says:

    Anyone know what it would cost to buy an interest rate swap for Jan 2010? Or if that’s even possible for a residential mortgage?

  5. 5
    patient says:

    This is good for everyone and working for lower mortgage rates is to me the only way the government can support the housing market that is fair and is not going to cost a gazillion dollars. It will in no way prevent the the ongoing bubble correction but low rates should help stabilizing markets once they have corrected.

  6. 6
    Curtis says:

    by the time you go to bank and ask for this rate, wait for the approval and complete the close out, price of the home you buy will depreciate another 3%.

  7. 7
    BanteringBear says:

    Wow. The blog has turned into a shameless plug for the mortgage lending industry.

  8. 8
    WestSideBilly says:

    @ #7

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

  9. 9
    Ray Pepper says:

    Since we combined forces with National City (PNC), these MTG reps have been jumping around here all day happier then I have seen them in 6 months. They are going to burn the midnight oil tonight I’m sure. The Mtg Reps in the next office stated to me they locked 93 Loans today before the rate took a bump up. It appears there will be a Christmas after all. I’m happy for them.

  10. 10
    Wmscot says:

    The cost it would be for you to get the 5% or 5.5% rate would take you over five years to recoup the fees, The mortgage brokers are starving right now and they will do anything to get you to call so they can sell sell sell !

  11. 11
    Jonness says:

    bankrate.com says the average is 5.98%. What’s the catch for the 5%? Do you have to purchase a bunch of points or something?

  12. 12
    richie says:

    The most idiotic way of financing is to pay huge fees to lower the interest rate. If a person refinances or relocates, he or she will lose pre-paid points period.

    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.

  13. 13
    mikal says:

    Really Richie, vven if you never move?

  14. 14
    Scotsman says:

    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..

  15. 15
    jon says:

    Sometimes buying points helps if you can qualify for a better program because of the lower payments relative to your income.

    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.

  16. 16
    S-Crow says:

    Hi everyone,

    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

  17. 17
    jcricket says:

    It is possible to get a rate as low as 5.25% if you time things right. That’s how I got my fixed rate (5.25%) last year during the dip in February. Paid no points. Have a high credit score, have like 50% equity in the house (have owned it 7 years), and mortgage amount was conforming.

    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.

  18. 18
    jcricket says:

    To make the 50% equity thing clear, we bought a really old house in a nice neighborhood that hadn’t been improved in 60 years and put a work lot into it. Not just housing bubble increase. At any rate, paying points can sometimes make sense, but I’ve never thought that my life is sure enough to guarantee it, so I’ve avoided paying points.

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

  19. 19
    Sniglet says:

    Instead of experiencing joy, and relief, at the very low mortgage rates we actually ought to be cowering in fear… Falling treasury (and mortgage) rates are a flashing signal that deflation is gripping the global financial system. The only reason mortgage rates are falling is because of the tremendous amount of de-levering roiling the financial markets, as everyone pays down debt and joins the universal scramble for dollars.

    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.

  20. 20
    FreedomLover says:

    How can people who are living paycheck to paycheck, getting I/O loans, no down payments are going to pay points? These people can barely buy groceries.

  21. 21
    S-Crow says:

    Good point Sniglet.

    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.

  22. 22
    stephen says:

    Richie said: 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.

    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.

  23. 23
    EconE says:

    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.

  24. 24
    Rubner McGee says:

    I have money for the down, and am pre-approved and would like to buy, but the fact is that the over-priced greedmeisters are still asking double 2003 prices in the best areas of this city in which I care to live.This city has a long ways to fall, and I’m still not convinced it will, which keeps the must buy now mantra going, etc etc. The whole topic is real tired.

  25. 25
    masaba says:

    S-Crow, I would gladly buy a home in Seattle right now if seller’s here would be willing to part with it for 2004 levels. However, many still have their head in the clouds and are demanding prices that are much higher than that.

  26. 26
    S-Crow says:

    Masaba-

    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.

  27. 27
    Flotown says:

    So, S-Crow, back to my question from yesterday, can I purchase a swap for a 2010 rate on a fixed loan amount?

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

  28. 28
    mukoh says:

    Masaba,
    Put an offer on what you like. The least they can do is say no. My partner just got a steal on a duplex in West Seattle, $60k off the listing price which was already in the 2005 level.

  29. 29
    Scotsman says:

    The ten year bond, considered by many the “bell-weather” for 30 year rates, is at its lowest level in 50 years. Gov manipulation of the markets and cratering credit demand have given a gift to those who want/need to refinance. But this is only the beginning- deflation will continue to drive rates down well into next year. If you want to refinance, wait a bit. If you want to buy, have your head examined. What is the advantage of buying an asset that depreciates 10+% a year, just because you can get a 5% mortgage?

    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

  30. 30
    bigdollordog says:

    14 Scotsman // Nov 25, 2008 at 8:01 pm

    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..
    ______________________________

    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?

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