Mortgage Rates

[Bruce Freeman]

Any you financial guru's have a guess on what mortgage rates are going to do in the near future? I am looking into refinancing my home my current rate is 5.87, the home equity is 6.25 and the boats at 6.00. Thinking about rolling them all into one big lump some. All comments are welcome.

BF

 

[Christopher Laurencio]

Bruce,



I just got pre-approved yesterday for 5.791 30yr or 20 yr, both no points. I am happy with that rate. I have been using the same mortgage company for two home purchases and a refinance, it was called Cendant Mortgage but now it's called PHH Mortgage. It is part of the Cendant Corp. that I once worked for, they own the names of Century 21, ERA, Coldwell Banker, etc. One of the largest lenders around.



Here is the link, for them.

http://www.phhmortgage.com/home/landscape?jpid=Home&cid=13571



And yes, I think the rates are going to continue to rise on inflation fears the Fed is talking about. My thought process is, if you can get a rate below 6% Lock in ASAP, becuase it's not going to get lower by a material amount in the near future.



CJL
http://www.phhmortgage.com/home/landscape?jpid=Home&cid=13571

 

[Christopher Laurencio]

If your credit score is above 800 you should be able to get a very good rate with them w/o points.

 

[Steve Hutson]

My new house is on 4.25 for 30 years, closed in July. Not sure how that might help you on a re-fi., but there you go.



Steve

 

[Jim in VA]

Steve - that's an incredible rate on a 30 year fixed! Any points involved?



Bruce - although I'm no financial expert, I have discussed this very issue with my financial advisor on several occasions. His read is similar to CJL's in that any rate on a 30 year fixed with zero points that can be had for less than 6% is very good. There may be some fluctuations in the tenths of a percentage, but that really doesn't amount to significant differences in actual $$$ unless you are borrowing huge amounts. With the feds continuing to raise rates to stave off fears of inflation and the economy still relatively stable, rates are only likely to go up.



Good luck!



JC

 

[Bruce Freeman]

I was hopeing someone would tell me they would drop again because of the high energy cost.

Thanks

BF

 

[Jim in VA]

Bruce - that's a possibility, but in my totally amateur opinion, a distant one. I think you would have to see high energy costs sustained over a significant period of time to have a lasting effect on the economy, which in turn, would drive the feds to lower interest rates. If we have a cold winter increasing demand for home heating oil and natural gas, that may be a possibility, but even that is no guarantee of lower rates. For example, even now, with interest rates increasing, mortgage rates are staying low compared to historic norms. For now, there appears to be a disconnect between the fed's rate and mortgage rates. By all traditional reads, the mortgage rates should have shot up by now, but for some reason, they are staying low. Likely due to the fact that the short term rate by the feds is not directly tied to the long term rates for mortgages. Remember, less than ten years ago, a rate of 8.13% was considered good!



JC

 

[Steve Hutson]

Jim C, There were no points involved at all. From what I gathered, most people "lock in" their rate around 60 days prior to closing. I locked my rate at 120 days before closing so I had to pay a $600.00 fee to lock in. At closing I got my $600.00 back.



I started getting antsy because Greenspan was set to raise intrest rates is the reason I locked in so early. Heck, I don't think that we even had any drywall up when I locked in.



I don't know if it being new construction made any difference, I wouldn't think so.



Steve

 

[Michael Snow]

I have to argue here.... what I'm reading is that you want to roll your house, boat, and home equity loan into a new mortgage?



Never, never, never, never, never put your home on the line for a toy. If you're like most everyone else, a couple of paychecks missed and you're in super-heated water. Should you ever have financial issues, you need to be able to choose which bills you pay. So you lose the boat to a repo... big deal. Your credit score drops, you'll end up owing on the boat (since most everyone is way upside-down on their boat loan).... but you still have a house -- with a fair amount of equity it would appear. Now, put the two in the same basket and when you can't pay for the boat and the house, the bank takes both. If you try to sell quickly, you'll probably get much less than if you had time to sell. If you finance for 30 years, your boat is also financed for 30 years. The extra interest you'll pay FAR offsets any tax deduction from the interest.



I'm not a financial counsellor, but could sure use one, and even I wouldn't finance a boat with my house.

 

[Steve Rizza]

Mike makes a good point.

When I re-financed a few years back I was tempted to roll both car payments in to save a few bucks each month.

Luckilly I changed my mind and stuck out both payments. One is now paid off and one year to go on the other, instead of paying for them for the next 15 years.







Steve

 

[Bruce Freeman]

Thats why I ask here, I never liked the idea of extending a loan (makeing the amount due longer) and the boat rate is not that bad, heck if I tried harder I could sell the boat to pay it off. I am just looking at options to save money and I understand that takeing a 10 year (boat) loan and dragging it out to 30 years at almost the same rate is not cost effective. I don't even want to refinance but I was thinking if the rates would drop again, I could save some there and at least roll the home equity loan (which I screwed up and is adjustable) might be a good idea, just looking at options.........

BF