Comments on: Mortgage Rates Rising with Inflation http://raincityguide.com/2008/06/13/mortgage-rates-rising-with-inflation/ Seattle's Leading Resource for Real Estate Information Sun, 08 Nov 2009 01:47:42 -0800 http://wordpress.org/?v=2.8.4 hourly 1 By: Rhonda Porter http://raincityguide.com/2008/06/13/mortgage-rates-rising-with-inflation/#comment-319897 Rhonda Porter Wed, 18 Jun 2008 20:18:20 +0000 http://raincityguide.com/?p=1936#comment-319897 Roger, I just received confirmation from one of my retail contacts at Wells Fargo :( it's true... "We have declared King, Snohomish and Pierce to be "soft" markets. We have a scale of 1-4, 1 being stable, 2 being soft, 3 being distressed and 4 being severely distressed. There is a 5% LTV reduction for each." Roger, I just received confirmation from one of my retail contacts at Wells Fargo :( it’s true…

“We have declared King, Snohomish and Pierce to be “soft” markets. We have a scale of 1-4, 1 being stable, 2 being soft, 3 being distressed and 4 being severely distressed. There is a 5% LTV reduction for each.”

]]> By: Rhonda Porter http://raincityguide.com/2008/06/13/mortgage-rates-rising-with-inflation/#comment-319809 Rhonda Porter Wed, 18 Jun 2008 01:27:21 +0000 http://raincityguide.com/?p=1936#comment-319809 Ardell, I remember my loan officer (when I bought my second home and I was not yet in mortgage) telling me what a great deal it was to have your mortgage priced with a 1 point orig. and 1 point discount. 2 points! The fact is, if you refinance or sell before you "break even" on that cost, which any point regardless of what you call it (discount or origination) is a cost; you've probaby wasted some money. The mortgage industry, believe it or not, has evolved quite a bit...just like I'm sure real estate agents have progressed since you've started in the RE industry. ;) Ardell, I remember my loan officer (when I bought my second home and I was not yet in mortgage) telling me what a great deal it was to have your mortgage priced with a 1 point orig. and 1 point discount. 2 points! The fact is, if you refinance or sell before you “break even” on that cost, which any point regardless of what you call it (discount or origination) is a cost; you’ve probaby wasted some money.

The mortgage industry, believe it or not, has evolved quite a bit…just like I’m sure real estate agents have progressed since you’ve started in the RE industry. ;)

]]> By: ARDELL http://raincityguide.com/2008/06/13/mortgage-rates-rising-with-inflation/#comment-319808 ARDELL Wed, 18 Jun 2008 01:03:26 +0000 http://raincityguide.com/?p=1936#comment-319808 Everyone has been talking about the lending industry getting back to where it was in more conservative times. When I started in real estate, most if not ALL mortgages were done with 3 points, and all quoting was on a 3 point basis. Everyone has been talking about the lending industry getting back to where it was in more conservative times. When I started in real estate, most if not ALL mortgages were done with 3 points, and all quoting was on a 3 point basis.

]]> By: Roger Ingalls http://raincityguide.com/2008/06/13/mortgage-rates-rising-with-inflation/#comment-319803 Roger Ingalls Tue, 17 Jun 2008 23:45:15 +0000 http://raincityguide.com/?p=1936#comment-319803 Regarding assumable ARMS, why would you want one? They are generally based on a pretty standard margin (usually from 2.25 to 2.75) and an index. The index moves up and down with the market. You most likely will be able to get the same rate or better with a new origination, with a rate that is fixed for a number of years. Now, an assumable fixed rate, that may have some value, but remember those are only FHA and VA, and will almost always have mortgage insurance, even if the LTV is below 80%. I'd be happy to hear more from the old-timers on the subject.... Regarding assumable ARMS, why would you want one?

They are generally based on a pretty standard margin (usually from 2.25 to 2.75) and an index. The index moves up and down with the market.

You most likely will be able to get the same rate or better with a new origination, with a rate that is fixed for a number of years.

Now, an assumable fixed rate, that may have some value, but remember those are only FHA and VA, and will almost always have mortgage insurance, even if the LTV is below 80%.

I’d be happy to hear more from the old-timers on the subject….

]]> By: Rhonda Porter http://raincityguide.com/2008/06/13/mortgage-rates-rising-with-inflation/#comment-319802 Rhonda Porter Tue, 17 Jun 2008 23:43:00 +0000 http://raincityguide.com/?p=1936#comment-319802 Hey biliruben and Roger, you should call in and join us for the last 15-20 minutes of RCG conversations. :) That's where we're all at right now. Hey biliruben and Roger, you should call in and join us for the last 15-20 minutes of RCG conversations. :) That’s where we’re all at right now.

]]> By: Roger Ingalls http://raincityguide.com/2008/06/13/mortgage-rates-rising-with-inflation/#comment-319801 Roger Ingalls Tue, 17 Jun 2008 23:39:31 +0000 http://raincityguide.com/?p=1936#comment-319801 Yes, but it is at a cost equal to, or greater than, the principal amount of the loan. :) Yes, but it is at a cost equal to, or greater than, the principal amount of the loan. :)

]]> By: biliruben http://raincityguide.com/2008/06/13/mortgage-rates-rising-with-inflation/#comment-319800 biliruben Tue, 17 Jun 2008 23:35:19 +0000 http://raincityguide.com/?p=1936#comment-319800 Can you buy your rate down to a no-interest loan? Can you buy your rate down to a no-interest loan?

]]> By: Rhonda Porter http://raincityguide.com/2008/06/13/mortgage-rates-rising-with-inflation/#comment-319799 Rhonda Porter Tue, 17 Jun 2008 22:33:33 +0000 http://raincityguide.com/?p=1936#comment-319799 I'm not on the "assuming" end of the mortgage business...here's a good article and explanation: http://www.mortgagenewsdaily.com/wiki/Assumable_Mortgage.asp I’m not on the “assuming” end of the mortgage business…here’s a good article and explanation: http://www.mortgagenewsdaily.com/wiki/Assumable_Mortgage.asp

]]> By: Leanne Finlay http://raincityguide.com/2008/06/13/mortgage-rates-rising-with-inflation/#comment-319795 Leanne Finlay Tue, 17 Jun 2008 21:57:09 +0000 http://raincityguide.com/?p=1936#comment-319795 Bili, I agree with Rhonda, paying a gazillion points is too expensive, it's pre-paid interest, and I think it is tax-deductible, but I still don't think its the best plan. Personally, keeping that money in the bank is a better plan. Invest it, save it, whatever. Once you pre-pay to buy a rate down, you can never get that money back, and if you sell in the short-term, you don't want to be kicking yourself. But, having an assumable FHA loan may stead you well in future years if interest rates to up. It more or less depends on how many years you think you'll be in the place. I don't know what the cost to a new buyer is to assume an FHA loan, it used to be just $500 for the lender processing. I think there are a lot of assumable loans out there today, just doubt that many sellers know if they have one or not! But, sellers with high balance loans should ask their lenders if their loan is assumable, it might help get their home sold. Remember, an assumable loan has a processing fee of some amount, but there shouldn't be any new discount points or origination fees, so it could well be cheaper, if the loan amount works for the amount of cash a buyer has for down payment. Bili, I agree with Rhonda, paying a gazillion points is too expensive, it’s pre-paid interest, and I think it is tax-deductible, but I still don’t think its the best plan. Personally, keeping that money in the bank is a better plan. Invest it, save it, whatever. Once you pre-pay to buy a rate down, you can never get that money back, and if you sell in the short-term, you don’t want to be kicking yourself.

But, having an assumable FHA loan may stead you well in future years if interest rates to up. It more or less depends on how many years you think you’ll be in the place. I don’t know what the cost to a new buyer is to assume an FHA loan, it used to be just $500 for the lender processing.

I think there are a lot of assumable loans out there today, just doubt that many sellers know if they have one or not! But, sellers with high balance loans should ask their lenders if their loan is assumable, it might help get their home sold. Remember, an assumable loan has a processing fee of some amount, but there shouldn’t be any new discount points or origination fees, so it could well be cheaper, if the loan amount works for the amount of cash a buyer has for down payment.

]]> By: Rhonda Porter http://raincityguide.com/2008/06/13/mortgage-rates-rising-with-inflation/#comment-319791 Rhonda Porter Tue, 17 Jun 2008 21:19:18 +0000 http://raincityguide.com/?p=1936#comment-319791 I'm never for paying a gazillion points, biliruben! ;) Don't forget, you'll have upfront mortgage insurance and monthly mortgage insurance for at least 5 years...then the buyer must qualify for the mortgage, the lender has to agree and the rate needs to be favorable...which it could be! I’m never for paying a gazillion points, biliruben! ;) Don’t forget, you’ll have upfront mortgage insurance and monthly mortgage insurance for at least 5 years…then the buyer must qualify for the mortgage, the lender has to agree and the rate needs to be favorable…which it could be!

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