Mortgage Rates Going UP
Andy Hill
>can anyone explain to me *why* all of a sudden
>the mortgage rates are increasing? i have
>2 months to lock-in and am in a panic since
>they continue to rise.. when i first applied
>it was 6.65 now its 7.45 and that's only a
>4 week difference from when i applied until
>i was approved!
>
The US economy seems to be doing much better than expected. This
raises some inflation fears, which (among other things) causes
long-term interest rates to rise.
> can anyone forsee a decrease?
>
I wish I had a crystal ball for interest rates -- I could then retire
real early...
I personally think this is just a short-term spike. Leading economic
indicators, consumer debt, and my gut feel (for what it's worth) all
point to the economy slowing down in the next few months, which should
put downward pressure on rates. OTOH, rates are still pretty low by
the standards of the last 20 or so years, so they *do* have more
upside potential than downside.
Joe Hausauer
>
> In article <4hq7bb$u...@ns4-1.CC.Lehigh.EDU>, <ch...@Lehigh.EDU> wrote:
>
> >can anyeone explain to me *why* all of a sudden
> >the mortgage rates are increasing? i have
> >2 months to lock-in and am in a panic since
> >they continue to rise.. when i first applied
> >it was 6.65 now its 7.45 and that's only a
>
> Yes, that's the way the market is ran. Rates always trickle down very
> _slow_ like 1/8th at a time, but are quick to rise.
>
> In my last no-cost refi, in a 2 week difference, that same loan would
> have cost me 8,000.00 bucks. That's a big difference for 2 weeks.
> Also, it will take several months for rates to move down to this level
> *if* they ever do.Last Friday the unemployment report showed the largest jump in nonfarm
payroll employment since 1983. This resulted in the largest one day
decline in bond prices in the history of the bond market, a move of 3
points in price. Since mortgages are securitized and sold to Wall St.,
they are benchmarked against treasury bonds for pricing. The discount
points you pay are the way lenders price to reflect current market
value as they relate to treauries, which changes daily. Mortgage rates
jumped 25 to 50 basis points just as yields on treasuries did last
Friday. Two or three weeks prior to unemployment, Greenspan's comments
reflected expectations of a stronger economy. This coupled with no
discount rate cut led fixed income investors to sell over the last few
weeks. Check out our website www.snws.com for up to date mortgage
information.
--
Joe Hausauer, Vice President Seattle-Northwest Securities Mortgage
Group,
Keystroke Loans from the Keystroke Financial Network.
E-mail: j...@snws.com or call 1 800-664-1003.
Andy Hill
>can anyone explain to me *why* all of a sudden
>the mortgage rates are increasing? i have
>2 months to lock-in and am in a panic since
>they continue to rise.. when i first applied
>it was 6.65 now its 7.45 and that's only a
>your input will be greatly appreciated!!!!!
>
An interesting page for tracking the whys and wherefors of interest
rates is http://www.interest.com/news.htm. It tends to lag events by
about a day, but it's still got good info.
John McGing
I have 30 more days till my lock in goes away; 6.875 30 year with 1
point. I'm working to ensure settlement happens quickly!
--
------------------------------------------------------------------
jmc...@access.digex.net Nobody knows the troubles I've seen
JOHN.PF on GEnie Team OS/2 .... and nobody cares!
http://www.access.digex.net/~jmcging
Peter R. Cook
>ah...@boi.hp.com (Andy Hill) writes:
>
>>ch...@Lehigh.EDU wrote:
>>>can anyone explain to me *why* all of a sudden
>>>the mortgage rates are increasing? i have
>>>2 months to lock-in and am in a panic since
>>>they continue to rise.. when i first applied
>>>it was 6.65 now its 7.45 and that's only a
>>>4 week difference from when i applied until
>>>i was approved! can anyone forsee a decrease?
>>>your input will be greatly appreciated!!!!!
>>>
>>An interesting page for tracking the whys and wherefors of interest
>>rates is http://www.interest.com/news.htm. It tends to lag events by
>>about a day, but it's still got good info.
>
>
>I have 30 more days till my lock in goes away; 6.875 30 year with 1
>point. I'm working to ensure settlement happens quickly!
I bought in January. A didn't lock in until a few days before I made
the closing on the house. By doing this the rate went from 6.877 to
6.725. Something like that. I saved a good bit. Things are going up
because unemployment is dropping and wall street is panicking.
The reason they are panicking is because typically rates stablize or
go up when unemployment goes down. Signs of an improving economy. When
the GOP gets back in I expect another real estate boon. The house I
purchased for 132k will probably be worth alot more.
--
PRC Records/PRC Music(BMI)...prc@world.std.com...Check out the Blue Steel
web page: http://www.homeless.com/homepages/p...@world.std.com Iron Maiden
fan, Mopar driver, Tama & Paiste user. Vince McMahon is the antichrist.
RICKY D VAN MATRE
> ah...@boi.hp.com (Andy Hill) writes:
>
> >ch...@Lehigh.EDU wrote:
> >>can anyone explain to me *why* all of a sudden
> >>the mortgage rates are increasing? i have
> >>2 months to lock-in and am in a panic since
> >>they continue to rise.. when i first applied
> >>it was 6.65 now its 7.45 and that's only a
> >>4 week difference from when i applied until
> >>i was approved! can anyone forsee a decrease?
> >>your input will be greatly appreciated!!!!!
> >>
> >An interesting page for tracking the whys and wherefors of interest
> >rates is http://www.interest.com/news.htm. It tends to lag events by
> >about a day, but it's still got good info.
>
>
> I have 30 more days till my lock in goes away; 6.875 30 year with 1
> point. I'm working to ensure settlement happens quickly!
> http://www.access.digex.net/~jmcging
>
>Consider financing for 15 years. Or even 20. Have the lending
institution print out an amortization schedule showing you the payments
for 15, 20, and 30 year mortgages. There is very little difference
in the amount you pay and you could pay for half the time!! Then make
sure they don't lock you into a payment plans that penalizes early
repayment. Then pay off an extra 25-100 bucks every month on the
principal and you could save hundreds of thousands of dollars over the
life of the loan. If you can get 6.875 interest, lock it in!!! and get
them to make it for 15 years. One point is a bargain! Do it now before
anything changes! Don't be afraid. A mortgage can be very intimidating,
but remember if something happens, you can always rent out the house or
get an extra job. You can do it. and you'll get a healthy tax break.
Katie Mclane RPh I own a house, 6 apartments, 50 acres of land and a
small retirement home. By the way, your payment will go up from what
they quote you because of taxes and insurance, but it still is better to
own than to rent.
Mark Armstrong soft
>By the way, your payment will go up from what
>they quote you because of taxes and insurance, but it still is better to
>own than to rent.
Hmm, is it these days? What about those markets were housing values are
stagnant? Over a period of 10 years, my house went up $20K. My taxes
have gone up from $1200 to $3200/year.
From a pure investment view, is owning a house a good investment
these days?
Tim Foecke
Armstrong soft) wrote:
There was an analysis in a recent NY Times that the days of mega returns
on houses like in the 80s are over, and renting may be better even if you
intend to own for more than 3-4 years.
Blake Krass
>
>In article <Pine.SUN.3.91.960316162438.24514C-100000@verdi>
>rvan...@nmsu.edu (RICKY D VAN MATRE) writes:
>>
>> >Consider financing for 15 years. Or even 20. Have the lending
>> institution print out an amortization schedule showing you the
payments
>> for 15, 20, and 30 year mortgages. There is very little difference
>> in the amount you pay and you could pay for half the time!!
>
>your monthly payment for a 30-year mortgage would be $998, but if you
>opted for the 15-year loan, the payment would be a whopping $450 higher
>at $1398. It's great if you can afford it, but what if you want to buy,
>as the pundits all say, "as much house as you can afford"?
Your example is a little off. For the 15 year loan, the P&I is $1348, a
difference of $350, not $450. On top of that, you can typically get a
slightly lower interest rate on a 15-year note, which could drop it to
more like a $325 difference maybe.
Blake Krass
Pflugerville TX
Mark Armstrong soft
>
>On top of that, you can typically get a
>slightly lower interest rate on a 15-year note, which could drop it to
>more like a $325 difference maybe.
>
The only advantage to a 15 year mortgage is a lower interest rate. You can
make a 30 year mortgage into a 15 year by just increasing the payment.
Go buy a $10 finacial calculator and plug in the numbers.
Mark
Blake Krass
I DID use a simple calculator to point out the $100 mistake in the
original note -- I'm not sure what your point is, if you're directing it
at me.... In general, I agree with your comment, but would add that
another advantage in SOME cases is that it would enforce a level of
discipline that the buyer might not be able to maintain despite his/her
best intentions. The downside of course is that you would lose the
flexibility of using the money for something more important on occasion.
Blake Krass
Pflugerville TX
RICKY D VAN MATRE
> In article <Pine.SUN.3.91.960316162438.24514C-100000@verdi>
> rvan...@nmsu.edu (RICKY D VAN MATRE) writes:
> >
> > >Consider financing for 15 years. Or even 20. Have the lending
> > institution print out an amortization schedule showing you the payments
> > for 15, 20, and 30 year mortgages. There is very little difference
> > in the amount you pay and you could pay for half the time!!
>
> Oh, I don't know about that. If you are borrowing $150K at 7% interest,
> your monthly payment for a 30-year mortgage would be $998, but if you
> opted for the 15-year loan, the payment would be a whopping $450 higher
> at $1398. It's great if you can afford it, but what if you want to buy,
> as the pundits all say, "as much house as you can afford"?
>
> > Don't be afraid. A mortgage can be very intimidating,
> > but remember if something happens, you can always rent out the house or
> > get an extra job.
>
> Oh, I forgot! I can get an extra job! What a clever solution! Just make
> sure you have life insurance so that when you work yourself into an
> early grave from working 80 hours a week your spouse will have that
> house paid off even before the 15-year mortgage is paid. But it will
> all be worth it, won't it?
>
>
>
Maybe things changed, but I bought a $90,000 house in 1990, and the bank
printed out an amort schedule and there wasn't much difference-6 3/8%.
In addition, if you can't afford the extra 400 bucks or so, you shouldn't
be buying a $150,000 house, or you should be willing to work extra. In
addition, calculate how much you'll pay (!) both ways and you'll be
shocked how much it costs you. I'd rather have it paid off and retire
early than have to keep on paying and paying when most is interest.
What happens if you get sick when you're 55 and it's not paid off?
And, also, hard work never hurt anyone. Katie
Bill Lewis
>carl...@perkin-elmer.com (Dane Carlson) wrote:
>>> >Consider financing for 15 years. Or even 20. Have the lending
>>> institution print out an amortization schedule showing you the
>payments
>>> for 15, 20, and 30 year mortgages. There is very little difference
>>> in the amount you pay and you could pay for half the time!!
>>
>>Oh, I don't know about that. If you are borrowing $150K at 7% interest,
>>your monthly payment for a 30-year mortgage would be $998, but if you
>>opted for the 15-year loan, the payment would be a whopping $450 higher
>>at $1398. It's great if you can afford it, but what if you want to buy,
>>as the pundits all say, "as much house as you can afford"?
I basically fit almost exactly into this category. My mortgage a
little more that $150k, with an interest of 6 7/8%. I bought as much
house as I could afford and qualify for as a single (now married).
This was about 2 1/2 years ago. It's an older house that we are
constantly improving. With the total PITI and pmi, we don't have much
left over to be attempting to make extra payments to the mortgage.
I've often wondered how this affects the difference in the tax
situation with regard to the deductibility of the interest over the
life of the loans (15/20/30). Right now, it helps us out quite a bit.
Has anyone assessed the impact of the tax liability? We currently get
about $10k in interest payments that can be deducted.
>Your example is a little off. For the 15 year loan, the P&I is $1348, a
>difference of $350, not $450. On top of that, you can typically get a
>slightly lower interest rate on a 15-year note, which could drop it to
>more like a $325 difference maybe.
That's still alot. My (total) monthly payment would be around $1800
which at $50k/year salary leaves about $400/mo. left over to pay
everything else (after Fed taxes, SS, insurance, and some savings).
That's stretching it. Remember I am basing all of this on my income
alone, my wife's goes towards home improvements.
Bill Lewis
NSWC-Carderock Division
Code 606
SSMD Test Engineer
lew...@oasys.dt.navy.mil (work)
X2742
Blake Krass
>.... With the total PITI and pmi, we don't have much
>left over to be attempting to make extra payments to the mortgage.
>I've often wondered how this affects the difference in the tax
>situation with regard to the deductibility of the interest over the
>life of the loans (15/20/30). Right now, it helps us out quite a bit.
>Has anyone assessed the impact of the tax liability? We currently get
>about $10k in interest payments that can be deducted.
You pay less interest on shorter term loans. For example, a $150K loan
for 30 years at 7% has over $10,500 in interest the first year and more
than $200,000 in interest over the full 30 years. The same loan for 15
years has over $10,200 interest the first year and well under $100,000
(actually less than $93K) over the full term. But be careful about the
tax part -- it's a heck of deal, isn't it? Uncle Sam will let you pay as
many dollars as you want, and give you back 28 cents for each one. You
could probably find lots of people who'd go that one better. "OK, give
me as much money as you want, and I'll give you back *30* cents for each
dollar."
Blake Krass
Pflugerville TX
O'Hara Shun Ping (303)293-4594
: On 29 Mar 1996, Dane Carlson wrote:
: > In article <Pine.SUN.3.91.960316162438.24514C-100000@verdi>
: > rvan...@nmsu.edu (RICKY D VAN MATRE) writes:
: > >
: > > >Consider financing for 15 years. Or even 20. Have the lending
: > > institution print out an amortization schedule showing you the payments
: > > for 15, 20, and 30 year mortgages. There is very little difference
: > > in the amount you pay and you could pay for half the time!!
: >
: > Oh, I don't know about that. If you are borrowing $150K at 7% interest,
: > your monthly payment for a 30-year mortgage would be $998, but if you
: > opted for the 15-year loan, the payment would be a whopping $450 higher
: > at $1398. It's great if you can afford it, but what if you want to buy,
: > as the pundits all say, "as much house as you can afford"?
: >
: > > Don't be afraid. A mortgage can be very intimidating,
: > > but remember if something happens, you can always rent out the house or
: > > get an extra job.
: >
: > Oh, I forgot! I can get an extra job! What a clever solution! Just make
: > sure you have life insurance so that when you work yourself into an
: > early grave from working 80 hours a week your spouse will have that
: > house paid off even before the 15-year mortgage is paid. But it will
: > all be worth it, won't it?
: >
: >
: >
: Maybe things changed, but I bought a $90,000 house in 1990, and the bank
: printed out an amort schedule and there wasn't much difference-6 3/8%.
: In addition, if you can't afford the extra 400 bucks or so, you shouldn't
: be buying a $150,000 house, or you should be willing to work extra. In
: addition, calculate how much you'll pay (!) both ways and you'll be
: shocked how much it costs you. I'd rather have it paid off and retire
: early than have to keep on paying and paying when most is interest.
: What happens if you get sick when you're 55 and it's not paid off?
: And, also, hard work never hurt anyone. Katie
Why not get a 30 year mortgage with no pre-payment penalty?
That way you do will have a relatively low monthly payment
and with the option to pay extra (when you have it).
P.S. Too much hard work kills - have you heard about those people
in Japan that work themselves to death?