Interest Rates on Fixed Mortgages?

Question

I am waiting to lock a 30 year fixed until the rates come back down. What do the professionals out there think about a timeframe for the rates to come back to the 5.5% range.

Any help is much appreciated...

Thanks,
John

Account Closed · Answer

To the point of rates not going lower, I literally just hit Bankrate at 3am CST on March 12th.

NATIONAL OVERNIGHT AVERAGES  TODAY +/- LAST WEEK

30 yr fixed mtg  6.07%   5.82%  
15 yr fixed mtg  5.49%   5.17%  
5/1 ARM  5.48%   4.93%  
30 yr fixed jumbo mtg  7.05%   6.82%  
5/1 jumbo ARM  6.01%   5.63%

As you can see, every one of the rates was up from last week. I was sort of taken off guard by that to be honest.

Toby Munk · Answer

Interest only loans are the best!!

Just think of it this way. If you preferr to have a 30 year amortized loan, go to one of the online tools, calculate what your payment would be over 30 years with the interest only interest rate and pay more every month.

It gives you the flexibility to stop making that principal payment if need be and only pay what you have to.

It is a free option to reduce your cash flow in times of need.

Now the trick is that the int only loans might have a slightly higher interest rate, not much but maybe 1/8th

I think it is worth it. Should start a thread on this topic alone. Real Estate lives from having free options.

John Kinsey · Answer

toby-

thanks for the post. i havent really looked much at interest only bc there is such a negative connotation around the idea (the wife is not a big fan). i should probably do some research and come to her w knowledge instead of "i think" it works this way...

i just want the 30 yr fixed rate to get down to 5.5 then i can lock and be happy. i am not in a huge hurry as i live in minneapolis and it is tough to build a new deck w frozen ground!

thanks
john

Toby Munk · Answer

Hi John,

even mortgage guys will not be able to give you a good answer. The markets are hard to calculate. What is keeping rates high is the uncertainties concerning the whole credit markets.

If you have excellent credit and lower LTV you should be able to get your rate. Why not go interest only?

Its a free option to pay less if you have to. You can always pay more when you can to emulate a 30 year mortgage?

John Kinsey · Answer

my current loan is 6.125 and i wanted to get about $25k cash out to build a new deck and a hot tub w/o changing my payment too much. i originally started the process when the rates were about 5.375 - 5.5.

i would obviously love if they got back down there but realistically if i can get to 5.625 i would do it...

from your post it sounds like you dont think they are going to go low again... right?

john

john@homeadmirer.com
www.homeadmirer.com

Rand Miller · Answer

What is your rate now?

There is plenty of pressure, preventing rates from dropping further. Ultimately investors are investing in the mtgs, so when rates get to low, mtgs loose their appeal.

There is a chance, if you can handle the 15yr pmt, then your rate is there already. Though the 30 yr is safer.

If you need cashout, take the loan now.

Best wishes to you.