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Mortgage Rates (7 Viewers)

Still have my mortgage at pre-pandemic rates of like under 3-4% so not much I'm gonna do with them BUT this has to be good for home values that have been mostly steady after a steep rise in cost, those homes never came back down, lower rates will only drive more sales and higher prices on homes.

If you were thinking about a 1st house, 2nd home, helping a relative, NOW would be a good time to take action on those thoughts
 
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Ministry of Pain said:
Still have my mortgage at pre-pandemic rates of like under 3-4% so not much I'm gonna do with them BUT this has to be good for home values that have been mostly steady after a steep rise in cost, those homes never came back down, lower rates will only drive more sales and higher prices on himes.

If you were thinking about a 1st house, 2nd home, helping a relative, NOW would be a good time to take action on those thoughts
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I will be re-financing soon on the house we just moved to in Wisconsin.
 
Terpman22 said:
Chadstroma said:
Update: Mortgage rates stayed steady today.... didn't go up or down. Which means the mortgage rates already had the 50 bps drop baked into them and none of the language spooked or excited the market.
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Figured it'd take more than the 2 hours before COB on the East Coast after the FED made the announcement yesterday for the effect of the mortgage rates to start taking hold.

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This is why I hate media and don't watch the news anymore- and anything I do read or see is met with extreme skepticism.

The PMMS (the Freddie Mac report that this is based off of) is backward looking data collection. They use the applications submitted to Freddie from Thursday to Wed and release the report each Thursday. In this case, that means that the rate drop quoted in this article was before the Fed cut rates and had no impact (other than the market already baking in the 50 bps drop). The one thing I am not clear on is what point in the life of the loan that the applications are submitted to Freddie.... it could be anywhere from when the file is run through AUS (doubtful) to the loan being closed and finalized and sent to Freddie (most likely in my mind) so with that in mind, this data could be anything from loans started a week ago to a month or more ago.

The best way to see the market and reacting to something like the Fed (or not reacting) is to view the 10 year Treasury Yield. Higher Yield = higher rates (not lock step but pretty dang close to it). If you look at the yield over the last two days you will see an increase leading up to the Fed decision, a sudden drop (likely the moment of the announcement) followed by an immediate jump back up with more added. Then a slight decline before adding more from where we were the whole previous week.
 
I may be looking to sell come spring time, lots of decisions if that becomes the case. Do I upgrade my kitchen and bathroom or sell as is. Do I try and transfer my loan to a fellow military member and have them take over my great interest rate while also paying me roughly what I'm looking to profit?
 
CGRdrJoe said:
I may be looking to sell come spring time, lots of decisions if that becomes the case. Do I upgrade my kitchen and bathroom or sell as is. Do I try and transfer my loan to a fellow military member and have them take over my great interest rate while also paying me roughly what I'm looking to profit?
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If you do the assumption to another service member then you still keep your full entitlement. You could certainly list it as assumable which will drive up interest.... now does someone have the cash difference of your sale price and loan balance? Maybe not. But if they do then it is a huge incentive for them to buy and keep your awesome rate that you must have got from like one of the best mortgage lenders in the country or something. In the end, there is no down side for you.... as long as they are a service member or vet with entitlement. If not then you can lose YOUR entitlement. So I would list it as assumable for sure. If a servicemember or vet offers then you can take it if a regular schmoe like me wants to buy it, I would decline.

The other consideration on that is the assumptions can take a long time to get done. The sevicing company has no real reason to push those through fast and easy versus a lender doing a loan who does. So, you would need to be prepared for an extended amount of time waiting to close on your house if you were to do an assumption.

But if you have flexibility in when it closes and give it to another service member, it helps the buyers out big time, makes your home much more marketable and other than the potential for delays- no real downside.
 
CGRdrJoe said:
I may be looking to sell come spring time, lots of decisions if that becomes the case. Do I upgrade my kitchen and bathroom or sell as is. Do I try and transfer my loan to a fellow military member and have them take over my great interest rate while also paying me roughly what I'm looking to profit?
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On the upgrade question its tough to answer without seeing your house and the rest of the market. With how much contractors are charging and the time it takes to get renovations done, I tend to be usually on the side of not renovating these days as its hard to get your money back. Typically it will just help you sell faster than the other guy but harder to quantify if you’ll recoup your investment.

A good thorough cleaning, fresh paint and fresh carpet or LVP can be relatively inexpensive and really help though. A really good agent can help make that decision but I have seen some good money thrown away on iffy renovations on the advice of agents before too. Most important thing is just be realistic on your price expectations, if the house looks the same as it did 30 years ago in general it’s going to take longer to sell and for less. If you want it to sell quick, be realistic on your pricing when listing it for sale and that will drive interest to the property. IMO, in general its better to price a little lower and let the market boost it up as opposed to price too high and sit out there for possibly many weeks to months.
 
Buckna said:
CGRdrJoe said:
I may be looking to sell come spring time, lots of decisions if that becomes the case. Do I upgrade my kitchen and bathroom or sell as is. Do I try and transfer my loan to a fellow military member and have them take over my great interest rate while also paying me roughly what I'm looking to profit?
Click to expand...

On the upgrade question its tough to answer without seeing your house and the rest of the market. With how much contractors are charging and the time it takes to get renovations done, I tend to be usually on the side of not renovating these days as its hard to get your money back. Typically it will just help you sell faster than the other guy but harder to quantify if you’ll recoup your investment.

A good thorough cleaning, fresh paint and fresh carpet or LVP can be relatively inexpensive and really help though. A really good agent can help make that decision but I have seen some good money thrown away on iffy renovations on the advice of agents before too. Most important thing is just be realistic on your price expectations, if the house looks the same as it did 30 years ago in general it’s going to take longer to sell and for less. If you want it to sell quick, be realistic on your pricing when listing it for sale and that will drive interest to the property. IMO, in general its better to price a little lower and let the market boost it up as opposed to price too high and sit out there for possibly many weeks to months.
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I forgot to address this because you throw a loan related question at me then I will start chewing it until it is gone.

But this is generally the direction of what I would have said and agree 100%. Unless you are going to do the work yourself (and are competent) then likely the cost of paying contractors now to do something is a cost you will not recoup. On top of that, everyone has their own taste, so you can update a bath to what you think is perfect but a potential buyer might think something way different from that direction.
 
If you guys go to buy a home... please do not do this....

Go to contract and sit on it as you shop around, Talk to a lender and then have them follow up with you almost on a daily basis for over a week leaving messages saying that since you are under contract we need to get an application in and start working on it. Finally, talk to the lender because the realtor informs you that they had to put an extension in which is a little over two weeks away and you continue to shop and compare.

I close loans quickly and many of my loans do close within two weeks but for crying out loud.... WHY?!

Thank you. I feel better. Back to the grind.
 
Chadstroma said:
If you guys go to buy a home... please do not do this....

Go to contract and sit on it as you shop around, Talk to a lender and then have them follow up with you almost on a daily basis for over a week leaving messages saying that since you are under contract we need to get an application in and start working on it. Finally, talk to the lender because the realtor informs you that they had to put an extension in which is a little over two weeks away and you continue to shop and compare.

I close loans quickly and many of my loans do close within two weeks but for crying out loud.... WHY?!

Thank you. I feel better. Back to the grind.
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Uh, did you get paid?
 
The Z Machine said:
Chadstroma said:
If you guys go to buy a home... please do not do this....

Go to contract and sit on it as you shop around, Talk to a lender and then have them follow up with you almost on a daily basis for over a week leaving messages saying that since you are under contract we need to get an application in and start working on it. Finally, talk to the lender because the realtor informs you that they had to put an extension in which is a little over two weeks away and you continue to shop and compare.

I close loans quickly and many of my loans do close within two weeks but for crying out loud.... WHY?!

Thank you. I feel better. Back to the grind.
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Uh, did you get paid?
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Only get paid if we close the loan... he still hasn't decided on what he is doing.
 
I could only find 1 HELOC lender that would do an investment property and the rate was 9.90% with substantial closing costs.

I found a local CU that will do a Home Equity Loan (TBD on rate) and they pay closing. I'm thinking of taking the HEL and putting the money not used immediately into an SP500 fund. Maybe hedge with another fund that's not correlated?
 
The Z Machine said:
I could only find 1 HELOC lender that would do an investment property and the rate was 9.90% with substantial closing costs.

I found a local CU that will do a Home Equity Loan (TBD on rate) and they pay closing. I'm thinking of taking the HEL and putting the money not used immediately into an SP500 fund. Maybe hedge with another fund that's not correlated?
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Oh yea, investment most will not do.

It is one area that I do have options that most banks/CU's don't. I would expect to be somewhere around what you already found as the risk is higher. If you want me to take a look for you, reach out.

As for the money moved into SP500 move... what are the plans and timeline for that money? You don't want to be in a position of a major market downturn and then you need to pull the money out and take the loss.
 
Home Equity Loan of $60k came back with 6.25% on a 15 year note. I was stunned at the rate.

It's not a done deal yet but they are trying to get appraisals done next week. I already told them that I cannot sign in person as I'm not going to be in the country.
 
The Z Machine said:
Home Equity Loan of $60k came back with 6.25% on a 15 year note. I was stunned at the rate.

It's not a done deal yet but they are trying to get appraisals done next week. I already told them that I cannot sign in person as I'm not going to be in the country.
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That is a good rate for an investment property for sure.
 
The Z Machine said:
What are my options for not signing in person? Will the lender accept a foreign notary?
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It really is up to the lender. Equity products are portfolio products so there is no real 'standard' on what they do. Each lender will make their own rules. I would hope the loan officer already checked in on this for you and could give you direction.

They may have an electronic option. At least one of my equity lenders doesn't have an actual closing, it is all online and is much more like a credit card application than it is a mortgage/equity loan application.

There may be foreign notary options.... I really don't know, that isn't something I have ever had to tackle before. Closing anywhere in the country is easy peasy but I haven't ever had to figure out one outside the country. Thinking through it.... one option may be a US embassy or consulate which I am sure have notaries. I can't see why there would be an issue with a US notary notarizing the docs outside the country would be an issue. You may not be able to close right after the 3 day right of recission but that is the only potential negative I can see on that.
 
Thanks, Chad. I *think* there's a US notary at the US Mission to the UN in Geneva, so I wouldn't have to go to the embassy. I'll ask my wife to look into those services as I think she knows at least one person at the Mission.
 
The Z Machine said:
Thanks, Chad. I *think* there's a US notary at the US Mission to the UN in Geneva, so I wouldn't have to go to the embassy. I'll ask my wife to look into those services as I think she knows at least one person at the Mission.
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I would bring it up again to the LO and make sure they can accommodate. Again, it will be whatever rules they decided to make up.
 
Long Ball Larry said:
Just wanted to mention that I used Chad’s company to refi and it was by far the easiest mortgage process I’ve ever had (even with a bit of a hiccup in the middle). Chad’s not licensed in my state but was attentive and followed up through the end and it worked out well. Recommend.
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I did the same, or a reference of his, twice. The second time she actually called me when rates went to 2.25% - I had 2.75% after the first refi, 30 years fixed. Easy peasy, like free money.
 
Long Ball Larry said:
Just wanted to mention that I used Chad’s company to refi and it was by far the easiest mortgage process I’ve ever had (even with a bit of a hiccup in the middle). Chad’s not licensed in my state but was attentive and followed up through the end and it worked out well. Recommend.
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Thank you- it was a pleasure working with you to get done what you needed done. The hiccup pissed me off but I am proud to be with a company that made it right without hesitation (When I worked at banks, if I got them to fix it, it would have been a huge battle)
 
Beef Ravioli Part 2 said:
Long Ball Larry said:
Just wanted to mention that I used Chad’s company to refi and it was by far the easiest mortgage process I’ve ever had (even with a bit of a hiccup in the middle). Chad’s not licensed in my state but was attentive and followed up through the end and it worked out well. Recommend.
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What kind of rates are we getting now?
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Poo rates.

The 10 yr treasury yield tells the story. The yield is inversely heavily related to mortgage rates. The higher the yield, the higher the rates. As you can see from this chart, rate have gone up and up from a couple of months ago. Some small relief recently. Consensus expectations (that I agree with) are rates to come back down and by end of year likely be about 100 bps down from where we are now.

I forgot to link the chart :lmao: :lmao: :lmao:

 
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Chadstroma said:
The Z Machine said:
Thanks, Chad. I *think* there's a US notary at the US Mission to the UN in Geneva, so I wouldn't have to go to the embassy. I'll ask my wife to look into those services as I think she knows at least one person at the Mission.
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I would bring it up again to the LO and make sure they can accommodate. Again, it will be whatever rules they decided to make up.
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To close this up, the credit union hustled and got things done during the 1 week window I was in town. Signed all papers in their main branch on Friday afternoon and deposited the check in my BofA account 30 mins before closing. I flew out to China that weekend.

The credit union was awesome to work with for the HE Loan on an investment property. They covered closing costs including appraisal as long as I don't pay it off in less than 2 years. Sounds like a plan to me.
 
It's happened before to me, will happen again and is not uncommon in my industry but....it always irks me when someone who obviously values you as an expert and uses your time for hours getting guidance, advice, counsel, etc to make a real estate purchase and then when they go under contract, they then shop around to find the lowest cost on the loan they can. I am always up front with my clients, if all you want is to find the lowest cost, then I am not your guy, though we are very competitive and best out most lenders, I am not a low cost lender. I am a professional lender with the best people in the business around me in our company. We hire the best and retain the best. If you want competitive rates, people who care and some of (without exaggerating) the best people in the industry to get this done for you quickly, smoothly and well then let's go. If you just want the cheapest guys you can, you can always find someone willing to do it for less and that usually means that that is what you are getting. Cheap labor for cheap wages. If you are promised 1% on a mortgage and they screw up the deal and don't close... what was that cheap route doing for you?

Argh... just venting. I just don’t get people who use you for your knowledge and expertise and then say "we found someone cheaper, thank you for all your help." There is a reason you didn't go to the cheap place in the first place... they suck. But them you don't do business with the guy you trust.

Sigh.

Ok... moving on.
 
Schmeabs said:
Stoneworker said:
Schmeabs said:
Stoneworker said:
Schmeabs said:
Stoneworker said:
Schmeabs said:
Stoneworker said:
Schmeabs said:
Stoneworker said:
Schmeabs said:
Stoneworker said:
Stoneworker said:
It is being widely reported that the bond markets have gotten way too far ahead of the Fed re: potential rate cuts. CNBC reported the market has currently priced in 150 bps in 2024 vs. the Fed's dot plot of 75 bps. Rates will back up if Fed actions fall short of mkt expectations (all else equal).
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Yep.

12/20/23 10-yr = 3.85%

4/11/24 10-yr = 4.57%
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I think we end the year around 3.50%
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So pray tell what is it you know that the market doesn't?

Futures contracts tied to the federal-funds rate show traders see rates ending the year around 5%, according to FactSet, implying just one or two quarter-point cuts this year. Entering January, traders had expected the Fed to cut interest rates six or seven times.

Source: 4/11/24 WSJ
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I am talking about 10 year Treasury rates, not Fed Funds rate
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Um. They are positively correlated .

The entire reason the 10-yr dropped so much in the first place since last Nov/Dec was because of anticipated rate cuts from the Fed.

Regardless, what's your rationale for the 10-yr dropping almost 110 bps in eight months?
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I expect growth and inflation will slow and apply downward pressure on interest rates. If we have a hard landing with a recession the 10 year could fall as low as 2.50%. If growth is strong I see it at 4% year end. However, the likely outcome is around 3.50% at year end. The labor market and wage costs have started to slow and I expect that to continue.
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And in all those slowdown scenarios there is 99.9% certainty the Fed will cut the Fed Funds rate as a response.

So basically you're just saying the current market view about future rate cuts is wrong (because "growth and inflation" expectations are exactly the factors driving those as well).

Nothing inherently bad about being different, just it would be more convincing if it came with some economic links to back it up or it's just a random prediction.
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No, I think we see 50-75 basis points of rate cuts this year. That is in line or a little short of expectations.
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Well in that case the 10-year won't move. Because the 50 bps of future cuts is already priced into the current 10-yr rate of 4.6%. It won't go to 3.5% as you predict without new information that significantly changes existing economic expectations. That's how markets work.

The only reason the 10-yr rates have backed up from December is because expectations of the Fed Funds rate have changed. It's right there in my first post in bold underline.
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I am very versed in how markets work, I have been managing money over 20 years. I don't disagree with you that rates have backed up with some inflation numbers coming in hotter than expected. I just see that changing and I will agree to disagree with you.
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Go find any current yield curve. Look at the rate 10 yrs and 8 months from now. It's approx 4.6%. That's a proxy for what investors currently expect the 10-yr to be yielding at the end of the year absent any new information. 3.5% is [not accurate]. But thanks for the conversation.

www.ustreasuryyieldcurve.com

US Treasury Yield Curve

An app for exploring historic interest rates
www.ustreasuryyieldcurve.com
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I'll assume you believe the 10 year will end the year at 4.60%. We can revisit this at year end. Have a great day!
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Well whaddya know. It's the end of the year and the 10-yr Treasury closed almost exactly at......4.6%.

Hopefully you got all your UBS pals predicting 3.5% a subscription to my bond market newsletter for Christmas so they can brush up on their forecasting skills.

Have a great day and better luck next year!
 
Chadstroma said:
It's happened before to me, will happen again and is not uncommon in my industry but....it always irks me when someone who obviously values you as an expert and uses your time for hours getting guidance, advice, counsel, etc to make a real estate purchase and then when they go under contract, they then shop around to find the lowest cost on the loan they can. I am always up front with my clients, if all you want is to find the lowest cost, then I am not your guy, though we are very competitive and best out most lenders, I am not a low cost lender. I am a professional lender with the best people in the business around me in our company. We hire the best and retain the best. If you want competitive rates, people who care and some of (without exaggerating) the best people in the industry to get this done for you quickly, smoothly and well then let's go. If you just want the cheapest guys you can, you can always find someone willing to do it for less and that usually means that that is what you are getting. Cheap labor for cheap wages. If you are promised 1% on a mortgage and they screw up the deal and don't close... what was that cheap route doing for you?

Argh... just venting. I just don’t get people who use you for your knowledge and expertise and then say "we found someone cheaper, thank you for all your help." There is a reason you didn't go to the cheap place in the first place... they suck. But them you don't do business with the guy you trust.

Sigh.

Ok... moving on.
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Prob was a little more sensitive than my normal disposition when this came up. :lmao:
 
ghostguy123 said:
Anyone seeing people have issues getting mortgages due to insurance stuff?
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I know FL is just downright nasty and CA not far behind it. Insurance rates have been rising across the country- everyone is paying for the hurricanes and fires even if you live a thousand miles from those affected areas.

When it comes to insurance costs, it is not as much of can you get a mortgage and more of a matter at how much can you qualify for and insurance is certainly cutting into that for many people.

I do think we are going down a path of an insurance crisis though. A number of insurance companies are simply no longer writing policies in certain areas and that will only drive up the costs of what you can get.
 
Chadstroma said:
ghostguy123 said:
Anyone seeing people have issues getting mortgages due to insurance stuff?
Click to expand...
I know FL is just downright nasty and CA not far behind it. Insurance rates have been rising across the country- everyone is paying for the hurricanes and fires even if you live a thousand miles from those affected areas.

When it comes to insurance costs, it is not as much of can you get a mortgage and more of a matter at how much can you qualify for and insurance is certainly cutting into that for many people.

I do think we are going down a path of an insurance crisis though. A number of insurance companies are simply no longer writing policies in certain areas and that will only drive up the costs of what you can get.
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National carriers upping their rates overall in order to compensate for lower margins in areas more prone to disasters is how the market will/should react to this problem. Isn’t that a good outcome?
 
tommyGunZ said:
Chadstroma said:
ghostguy123 said:
Anyone seeing people have issues getting mortgages due to insurance stuff?
Click to expand...
I know FL is just downright nasty and CA not far behind it. Insurance rates have been rising across the country- everyone is paying for the hurricanes and fires even if you live a thousand miles from those affected areas.

When it comes to insurance costs, it is not as much of can you get a mortgage and more of a matter at how much can you qualify for and insurance is certainly cutting into that for many people.

I do think we are going down a path of an insurance crisis though. A number of insurance companies are simply no longer writing policies in certain areas and that will only drive up the costs of what you can get.
Click to expand...
National carriers upping their rates overall in order to compensate for lower margins in areas more prone to disasters is how the market will/should react to this problem. Isn’t that a good outcome?
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Not for me, living in flyover country.
 
Chadstroma said:
ghostguy123 said:
Anyone seeing people have issues getting mortgages due to insurance stuff?
Click to expand...
I know FL is just downright nasty and CA not far behind it. Insurance rates have been rising across the country- everyone is paying for the hurricanes and fires even if you live a thousand miles from those affected areas.

When it comes to insurance costs, it is not as much of can you get a mortgage and more of a matter at how much can you qualify for and insurance is certainly cutting into that for many people.

I do think we are going down a path of an insurance crisis though. A number of insurance companies are simply no longer writing policies in certain areas and that will only drive up the costs of what you can get.
Click to expand...
Insurance might be the reason we’re seeing an increase in listings in a place we’d love to buy a rental. But insurance could kill that dream. It’s on the Atlantic.
 
tommyGunZ said:
Chadstroma said:
ghostguy123 said:
Anyone seeing people have issues getting mortgages due to insurance stuff?
Click to expand...
I know FL is just downright nasty and CA not far behind it. Insurance rates have been rising across the country- everyone is paying for the hurricanes and fires even if you live a thousand miles from those affected areas.

When it comes to insurance costs, it is not as much of can you get a mortgage and more of a matter at how much can you qualify for and insurance is certainly cutting into that for many people.

I do think we are going down a path of an insurance crisis though. A number of insurance companies are simply no longer writing policies in certain areas and that will only drive up the costs of what you can get.
Click to expand...
National carriers upping their rates overall in order to compensate for lower margins in areas more prone to disasters is how the market will/should react to this problem. Isn’t that a good outcome?
Click to expand...
Sarcasm??
 
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