However, all the banks get rescued? Oh, and will people say: “Oh, but the interest rate really is not about mortgage rates. But, actually, it is – but only when it seems it is convenient for the banks. Again in a bubble, and it was desirable for banks to cut rates even cutting them. Now, regardless of the rates the Fed LIBOR and do – Banks and mortgage rates over time to more than 5%. What is wrong? Also, why does not allow banks to “opt out” on loan are given, and re-financing, in particular . she is denied simply said income loans, including refinancing. people in an attempt “to change the loan” which is only a desperate chance to obtain relief on mortgages. definitely made the save banks only this problem worse.
I have interest only arm I am currently paying 3.875%, and indexes in August 2010.Op 8 / 2010, I do not need payments of principal and interest to pay the price of LIBOR +1 year 2.25%. In the current LIBOR at 1,5%, to 3.75% – a very good price. Of course, is limited optrek.Die rate for LIBOR 8.875%, which is high, but even at this rate, and I can still afford my payment. I am in no danger of exclusion, but if I lose my job for a long time. I certainly do not need a Security koers.Dit fixed loan Freddie Mac insured to meet the 80% LTV, so I can have a refinance simplified for about 5-6% with closing costs low and will live here a long time (perhaps 15 years and over). So, I connected, at least in the short term, a rate less than the base het.As mortage with a fixed interest rate I refinement, and will have a higher rate of pay, but will not be guaranteed payment to go.
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Why the interest rates on home equity line
Loan Mortgage 7.354% April is much higher than
Loan Mortgage 7.354% April is much higher than
Why interest rates on mortgage loans to higher
should i lock in my variable rate 2nd
Why are jumbo mortgage loan rates higher than
The bank can set interest rates lower than
why is payoff amount higher than loan balance
what determines the interest rate on your saving
can i transfered my mortgage loan with another
I agree with you. The reason why rates are not lower right now is because banks and the secondary investors have less competition and they are trying to recoup some of billions in write downs of the last year or so. These banks have taken billions from the fed to increase lending but instead they are still tightening up the requirements.
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LikeDislikeWow! First off, mortgage rate are loooooooooow! Right around 5.25%! What do you want them to just give you money for free? Seriously, name me one other type of loan that has a lower rate. Also, look at the historic rates, not just 04, and you will see that right now mortgage rates are as low as they have ever been. You need to gain some perspective!
As for stated income loan (a.k.a. liar loans) are a major part of the problem – these are the loans that got the banks in so much trouble. Why would the continue with these risky loans?
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LikeDislike1. Rates are historically low now. Think about it: you can get a 30-Year fixed rate loan for under 5.25%. Now, think about how much risk there is inherent in holding debt at a fixed rate for 30 years. What if home prices and the economy continue to decline so that you have even more mortgage defaults and the liquidated collateral (houses) aren’t worth enought to pay you back? What if inflation sky rockets and interest rates go through the roof and you’re still getting only 5.25% so that you’re actually losing purchasing power on an annual basis? All of these risks have to be taken into account. So, 5.25% is pretty good.
2. Also, Fed. Funds is the overnight rate available to certain banks with certain types of collateral to pledge. The Prime rate is actually completely arbitrary and represents both the bank’s risk premium and profit margin on loans so mortgage rates (long-term) which are tied to, among other things, the 10yr T-Bill and Fed. Funds (very short-term) are only vaguely related. After all, most banks don’t hold the debt for 30 years; they sell the debt to investors so they have to take into consideration what return those investors are willing to accept. This is especially true with the current market conditions and liquidity preference of investors.
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LikeDislike5.25-5.5% is historically rock bottom low for mortgage rates (what they are now). We’re at a 30 year low right now iirc. So much so that refinancing applications are exploding in number, at a rate nobody could have predicted, and I mean seriously exploding (people recognize that its a great deal right now).
As to the ‘math’ you’re putting forth. Yes, bank rates are higher than fed rates. The RISK in giving out a loan right now is higher than it normally is, a LOT higher (if you’ve read the paper in the last year you’ll see there’s a teeny tiny foreclosure issue right now) and so banks are trying to offset that RISK (that’s what a rate does) by increasing the disparity between what the FED rate is vs their own offered rates (IE larger percentage gap between what they would normally charge vs normal FED rate).
Are banks part of the problem? Sure, but not on this particular issue.
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LikeDislikebill, i have been in the real estate business for 18 years AND I have a degree in Economics.
I can say that you are full of it. Your arguments are totally wrong.
Banks don’t determine the rate, the market does.
Rates are at a all time low. In 2004, rates were in the upper 6% range.
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LikeDislikeMortgage lenders have no clue as to what the future holds for them or borrowers. Borrowers have even less knowledge of what the future hold for them. But lenders expect you to know. That’s why then write loans in their favor (ARMs are in their favor). I haven’t heard of any of the ARMs that have adjusted down in this current market. Your ARM will go up to make up for the lost interest revenue of the lender during your low interest years.
If I could refinance to 6% fixed or less, I would seriously consider it. Even though your rate is very low now, it could go to 8.875% as you indicate. How long will it stay there is anybody’s guess.
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LikeDislikeYour question suggests that you do not belong in an ARM product. If you were my client, I would probably recommend refi.
However, the technical answer to your question has two parts.
Part 1: What is your expectation for interest rates over the next 15 years? If you do not have any expectations, you do not belong in an ARM.
Part 2: What have you done with the difference between your normal mortgage payment and your ARM payment? If you don’t know what I am talking about, you don’t belong in an ARM.
There are three good candidates for an ARM product. None of them apply to the typical mortgage holder.
(1) Fixed ARMs: People who plan to live in a house for much shorter periods than the traditional mortgage. For example, if the gap between a conventional 30 year rate and a 5 year ARM is large and you expect to live in your house for less than 7 years, a 5 year ARM might be a good option. “Large” is subjective, of course, but traditionally it would be a least 150 basis points.
(2) Strongly cash flow positive home owner in a declining interest rate environment. This person would generally “budget” for the monthly payment of a 30 year conventional mortgage (or the ARM high limit) while taking out a 1-3 year ARM. Apply the difference in every month to the mortgage balance and you pay off your mortgage very quickly.
(3) High income/High asset renters in a high interest environment. “Renters” being slang. In select cases, a monthly mortgage payment that “jumps around” a good bit isn’t a problem so long as it is never larger than x% of monthly income. In those cases a LIBOR ARM or Interest Only mortgage may be a useful tool to keep housing expenses minimized in cases where clients like to move every few years. (Some rich people do with houses like the middle class do with new cars)
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