Mortgage Rates Hit 50-Year Low
This is pretty amazing: 30 Year mortgages are now 4.15%; 15 year mortgages are 3.51%. Here’s the Bucks blog:
Back in June, in a post about adjustable-rate home loans, Bucks mused about how nice it would be to have a mortgage interest rate that began with a “3.” The way things are going, that time may not be far off for fixed-rates loans, as well.
Mortgage rates reached record lows this week, according to the weekly market survey from Freddie Mac. The average rate on a 30-year fixed-rate loan fell to 4.15 percent, with borrowers paying an average point of 0.7 percent. That rate is down from 4.32 percent last week.
It is “the lowest in over 50 years,” Frank Nothaft, vice president and chief economist at Freddie Mac, said in a news release. The survey’s previous low was 4.17 percent in November 2010.
Regardless of the economy, if you own a home and can refinance, you should consider it. In NY state, we have CEMA loans (CONSOLIDATION, EXTENSION & MODIFICATION AGREEMENT) which do not require new mortgage filing taxes, a hefty 0.8% of loan amount. Note this only applies if you refi with the original sender.
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August 19th, 2011 at 10:06 am
We bought our house a little over two years ago at 4.85 percent. At the time, we thought we’d never refinance, that rates would never go low enough to be worth the hassle and expense. But right now, my credit union is offering 4.12 with no points. It is becoming worth thinking about.
August 19th, 2011 at 10:17 am
Yes, indeed, taking a look at a re-fi is a prudent action. Problem is, with so many folks under water on their present mortgage, they can’t get the value out of their residence to construct a comparable mortgage package.
With the financial bath millions have experienced with a personal residence (for most, their largest investment), low rates are a small consolation for the housing debacle being suffered. I envision a “new normal” with many more renters and a gradual downwade slope in home prices, still. Even lower mortgage rates will not be an incentive to buy a home, as many prospective buyers can see no end to the wealth destruction which is presently associated with home ownership, while being forced to contend with the aggravation of property taxes and other homeowner assessmentts that are based upon fictitious values to extract even more wealth for public largesse.
August 19th, 2011 at 10:18 am
If you do go for a refi be sure to lock in ASAP.
The credit union I used last Sept went as low as 3% for a 15 year.
I made the mistake of thinking they would live up to the closing date they gave me but they “postponed” it without notifying me.
By the time I chased down their closing attorney to insist on a closing date the 10 year treasury note had increased and I was “stuck” with 3.5%.
Buyer Beware.
August 19th, 2011 at 10:19 am
Refinance or not, housing still has a considerable LTV problem.
August 19th, 2011 at 10:24 am
I refi’d back in November at a rate I thought would never go lower: 4.25 for 15. That’s just stupid low. This new rate, if available, wouldn’t a 15 year now have to be 3.95 or less? Not enough for me to refi though. I’d have to get much lower than that for sure.
August 19th, 2011 at 10:27 am
Locked yesterday at 4% with -$1200 lender
August 19th, 2011 at 10:30 am
S&P futures were – 17 before open, and an hour into trading they’re up 13. That’s a 30 point swing in an hour. On no news. This means the losses after the Philly Fed release have been more than wiped out.
Fascinating.
August 19th, 2011 at 10:36 am
time to refi
payoff BofA that is “foreclosing” on me, and never ever see them again
not that ina fair world they would even stay in business
do it even paying closing costs again, its worth it.
August 19th, 2011 at 10:37 am
Markets are erratic on option fridays, logic is not required.
August 19th, 2011 at 10:39 am
Conundrum, record low rate, probably record low number of borrowers qualify.
VA and FHA offer assumable mortgages. There are no negatives aside from a little more paperwork, mostly intended to help homebuyers with small down payments but think about the advantages of selling a home with an assumable mortgage sometime in the future with a record low interest rate when market interest rates are much higher. It’ll be more valuable than a new kitchen! I submitted for my VA prequalification, just one page with a copy of my DD214.
Not necessarily lower int rates but avoids need for private mortgage ins. I bet local lenders esp in the south give breaks for VA morts!
August 19th, 2011 at 10:40 am
Concerned Neighbour:
You’re on a roll . . .
It is fascinating, but not in a good way (kinds’ like witnessing a drunk drive careen down the highway at high speed during rush hour).
Your comment about “Soviet Canuckistan” was a freekin’ hoot!
August 19th, 2011 at 10:43 am
In a long-term strategic plan, now is the time to sell your gold – if you have any – and buy real estate.
Gold is now too much loved, real estate is too much hated.
You can now get divvy stocks that pay out more than you can borrow money for. You can be paid to borrow.
August 19th, 2011 at 10:47 am
just checked my credit union (Penfed), VA morts are slightly higher than others, probably due to low down payment. Remember when the only way to sell a home was with seller financing or an assumable mortgage? Assumable mortgages are solid gold when int rates are high.
August 19th, 2011 at 10:50 am
Wally, Agreed.
Ben Shalom will love you for borrowing to buy stock – thats All American! Just borrow with a fixed rate!
Things will get a lot crazier if/when one of the Euro banks ends up in ICU
August 19th, 2011 at 10:54 am
I locked in 3.85 yesterday on a 30-fixed. Unbelievable.
August 19th, 2011 at 10:55 am
wally:
Now might be the time to buy a productive RE asset, but the bottom for RRE is not yet discernible. Gold is still ignored and/or disrespected by many. In light of the uncertainty and fairly obvious insanity elsewhere, I don’t think gold and housing will reverse polarity any time soon.
August 19th, 2011 at 10:55 am
mkt bounce was prefigured by yields which couldnt hold yesterday lows
even though early stocks looked like sh..
did i say lower vol this week? actually it is a little
also maybe higher lows
but now im wettin my pants like everyone else
not really
dont own much yet and can absorb a beating
did buy more tip puts yest
August 19th, 2011 at 11:09 am
I basically agree with theexpertisin about the housing market, with the caveat that at some point the rent/own cost ratio would encourage investors to buy properties to rent them out. Sure, maybe more people will stick to renting (I don’t think we’ll see a big rise in ownership rates again like we did in the bubble), but that means somebody has to be the landlord, right? In my neck of the woods, we already have a pretty tight and expensive rental market. Other areas, with excessive vacant inventory are going to be under pressure for a long, long time.
August 19th, 2011 at 11:29 am
Moopheus: The only snag is that everyone has the same idea. Five years ago, I didn’t know anyone who was a landlord: now I know of at least half a dozen colleagues who’ve made the same genius investment, buying up little disused shacks in order to rent them out. I say, beware of the investment property mania. Even new construction of multifamily apartments is looking somewhat bubbly…
http://www.irvinehousingblog.com/blog/comments/apartments-are-the-next-real-estate-bubble/
Another potential wrench in the works is if the GSEs really do start renting out foreclosures.
August 19th, 2011 at 11:38 am
I did a “self-refinance,” paying off a fixed balance at 5.75% with a home equity line at 2.74%. I expect to pay off the entire balance within a couple of years — before rates jump. Having half the interest rate means that money that would have been going towards interest is now paying down principle.
August 19th, 2011 at 11:39 am
dow didn’t even bother to drop this morning, simply opened 100 points lower from yesterday’s close. Doubt that ever happened more than a few times. Anyone know how often markets open at a large difference from prior day close?
August 19th, 2011 at 11:54 am
MikeDonnelly,
I think that happens when market orders (GTC) didn’t get executed from the previous day and are executed the next morning. I first noted that the day after that 25% drop day in 1987 but I’m sure it happens during large volume days since.
August 19th, 2011 at 12:19 pm
I’ve worked with the same finance company since 2000. We’ve refi’d every coupla years from 9 with a 12.5 second down to a 4%, which we’ve had since December. The last one we put a bid in for a 4%, kept the file current, and the door opened for one day. Did wonders for the cash flow. Play it aggressive. Whatcha got to lose?
August 19th, 2011 at 12:35 pm
Oh, yeah. The agent locked in the rate for 45 days. Every coupla days the lender wanted new paper. The agent said that was the case for everyone, not just us. They wanted hard copies of my checks, copies of blank pages from the bank accounts, etc. At 40 days, I called and pointed out that there would be costs if we didn’t close and it was not our problem. The agent rattled the lenders cage and said the charge will be to you. We closed and we bought the agent something nice.
August 19th, 2011 at 12:38 pm
“Regardless of the economy, if you own a home and can refinance, you should consider it. In NY state, we have CEMA loans (CONSOLIDATION, EXTENSION & MODIFICATION AGREEMENT) which do not require new mortgage filing taxes, a hefty 0.8% of loan amount. Note this only applies if you refi with the original sender.”
There is no requirement to refinance with the original lender to use a CEMA.
Mortgage tax in some areas of New York State is as high as 2.175%
August 19th, 2011 at 1:09 pm
[...] Here’s a headline for today: Mortgage Rates Hit 50-Year Low. “The average rate on a 30-year fixed-rate loan fell to 4.15 percent, with borrowers paying an average point of 0.7 percent.” (h/t Barry.) [...]
August 19th, 2011 at 1:50 pm
In a long-term strategic plan, now is the time to sell your gold – if you have any – and buy real estate.
Gold is now too much loved, real estate is too much hated.
You can now get divvy stocks that pay out more than you can borrow money for. You can be paid to borrow.
I like this, but still too early. Gold still going higher, real estate lower, divvy yields higher and ZIRP for many more years. Can’t argue with this trade now, but I suspect in 12-24 months you’ll be able to buy more real estate and high div-yield stocks with gold than today.
August 19th, 2011 at 2:27 pm
Oh, don’t worry, I have NO desire to be a landlord! I’m just saying, if some want to rent, others will.
August 19th, 2011 at 2:54 pm
Just noticed an online ad for a gold company endorsed by Glen Beck – gold must be topping out right?
August 19th, 2011 at 3:02 pm
I feel we are not at the bottom of the real estate market yet. Once the cash buyers dry up???
We still have bubble areas that need to pop. We still have owners that need to walk.
August 19th, 2011 at 4:16 pm
We refi’d to a 15-year at 5% back in 2003. But we’ve been paying a little extra, and should retire the mortgage in the fall of 2014, barring catastrophe. (Then we can stash the money in the 4 year old child*’s college fund instead.) Hardly worth the effort of refinancing for 3 years when most of your payment is principal anyway.
*Firefly (Groucho): “Why, a four year old child could understand this. Run out and get me a four year old child, I can’t make head or tail of it.”
August 19th, 2011 at 7:31 pm
Will we try to refinance? I don’t know if I can bear to pay the refinance application fee and the appraisal fee only to find out that the house we bought in 2008 when the market was falling is now worth less than our loan amount. We put down 10%, we’ve paid an additional 10% since. We refinanced through the Obama refinance program once already — to 5.5% for 30 years. Because foreclosures are selling for $100,000 in this neighborhood, I have reason to believe the appraisal would come in very low indeed.
Aaron from Breckenridge http://www.luckymountainhome.com/
August 20th, 2011 at 7:58 am
There has to be some place that give second mortgages to help people refinance into a better rate. If they have been paying their current mortgage, and the combined monthly payment of the new first and second mortgage is lower than the payment on the old mortgage, then the risk would seem fairly low. The rate could simply be set to reflect the combined loan to value (the higher the LTV the higher the rate on that second). If the private sector could not take that opportunity, then government should. The lower monthly payment for these people would be stimulatory. Politically it would sell to give help to people who have actually been paying their mortgage on time.
August 20th, 2011 at 6:26 pm
DeD,
re.. your 07:58
maybe, now, you’ll begin to Understand the difference between being a (Financial Services) MAnufacturer, and a Consumer (of ‘Financial Products’)…