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Time to REFI again soon? Are flat 3% 30 year fixed mortgages on the horizon?

By BoomAndBustCycle   Follow   Wed, 20 Jun 2012, 10:37am   1,535 views   10 comments
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Are flat 3% 30 year fixed rates a real possibility in 2012 or 2013? I ran the numbers and we just refinanced last fall at 3.95% .. but 3% flat rate would be a HUGE savings on our $350ish mortgage... about $200 a month and the equity we'd be paying each month would be very close to even with the interest we are paying by year 3 of the refinance....if we could get a no-fee refinance like we did last fall .. (even the appraisal was PAID for by our broker!).

The only catch is the appraisal coming in high enough... which based on comps in my area currently.. it should.. guess we'll have to wait and see.

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1. PockyClipsNow Follow Befriend 19 threads 1,534 comments Los Angeles, CA

   1   11:06am Wed 20 Jun 2012   Share   Quote   Permalink   Like   Dislike   never pay fees or points to REFI. Roll the fees into the loan if you can and its worth it. The reason is you are gonna REFI every year forever until rates hit a half a percent - then .25% loans. Its gonna be weirdville until the wheels come off and we start over with 18% int rates. Not sure what that looks like. The dream of you sitting with a 3% mortgage for 30 years laughing at all the suckers with 8% mortages for the whole 30 years will never happen. Instead we all get lower rates forerver. From 1980 to now rates are a staggered down line. Dont bet on that trend reversing soon.

2. YesYNot Follow Befriend (2) 15 threads 430 comments Reston, VA

   2   11:13am Wed 20 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   I'm also thinking mortgage rates are going to keep going down. Why do you think 3% is coming soon?

3. robertoaribas Follow Befriend (23) 55 threads 3,795 comments Scottsdale, AZ robertoaribas's website

   3   11:48am Wed 20 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   wait for rates to be -10%!

4. BoomAndBustCycle Follow Befriend 28 threads 351 comments

   4   12:09pm Wed 20 Jun 2012   Share   Quote   Permalink   Like   Dislike   YesYNot says I'm also thinking mortgage rates are going to keep going down. Why do you think 3% is coming soon? Well partly because of this: "Fed extends 'Twist' program to drive rates lower" http://www.latimes.com/business/la-fi-fed-twist-20120620,0,3063925.story Even if my home loses another $10K when it's appraised.. I bought with an original appraisal of $435K at a price of $400K. So I have some buffer room..to maintain the proper equity ratio... The tricky part is PMI keeps rising.. So i want to maintain my 15% equity PMI price point. (really hope to get rid of it altogether in 3 years) I have a feeling if rates go down much below 3% it's because home prices took another big hit in REAL terms. Home prices have been in reality falling like a ROCK in terms of monthly financed payments since 2009... That I will give all the Bears... Even though the line looks fairly flat.. or a small dip from 2009-2012... If you bought a home and didn't refi in 2009... for the same price you bought in 2012... The person who bought in 2009 would have as much as $500 more in monthly payments on a $400K home than someone who just bought the same home for the SAME 2009 price. Monthly nut on a mortgage has been falling fairly dramatically for 3 years now.

5. BoomAndBustCycle Follow Befriend 28 threads 351 comments

   5   12:20pm Wed 20 Jun 2012   Share   Quote   Permalink   Like   Dislike   PockyClipsNow says never pay fees or points to REFI. Roll the fees into the loan if you can and its worth it. We didn't have to roll any fees into our loan the last REFI even! The sheer amount of equity you are paying on a 30 year mortgage financed at below 3% rates is pretty astonishing. Sure your probably losing equity every year rates are dropping.. But let's say you mortgage $350K... at 2.5% 30 year fixed rate (a possibility in a year or two). Your monthly payment is : $1382 and your paying $661 in equity each month. So that's $721 a month of interest... add in property taxes, pmi and insurance. And you're probably paying around $1200 total costs excluding equity payments and excluding mortgage interest deduction. I don't see many homes that would require a $350K mortgage that would rent for even close to $1200 a month. Most homes that require that large of a mortgage would rent for $2000+ a month. Interest rates falling to sub-3% range really complicates buy vs. rent scenarios.

6. EBGuy Follow Befriend 4 threads 2,095 comments

   6   12:28pm Wed 20 Jun 2012   Share   Quote   Permalink   Like   Dislike   wait for rates to be -10%! I've seen articles that claiming that they'll be an extra $1+ trillion demand for Treasuries due to Dodd-Frank; there are collateral requirements for the derivatives clearinghouse set up by the legislation. We've already seen effective negative yields on short term bonds -- welcome to deflation nation.

7. robertoaribas Follow Befriend (23) 55 threads 3,795 comments Scottsdale, AZ robertoaribas's website

   7   12:35pm Wed 20 Jun 2012   Share   Quote   Permalink   Like   Dislike   We are seeing some of the lowest rates in history, partially based on a fear flight to Treasuries as the euro seems on the edge of disintegrating... It is very hard to predict much lower rates, when they are nearing the lowest ever, and the US is running deficits that have caused rate increases in other countries: iceland, greece, spain, italy, etc. etc. Notice Spain, with moves to lower rates, just saw them increase contrary to predictions.... so It isn't certain that the FED can push them down more. There is a margin of expense to collecting mortgage payments: staff to collect them, mailing statements, record keeping etc. I'm not sure the cost of a mortgage has ever been less than say 1.5% above the 10 year treasury, so to see some of these rates, you'd have to see 10 year T-bills much lower than today. Not saying it is impossible, but I'd hardly bet on it. If you are correct, I'll refinance everything I own with a loan! Soon I will have a little more than 1 million in mortgage debt, so obviously, that would be a huge boon to me!

8. YesYNot Follow Befriend (2) 15 threads 430 comments Reston, VA

   8   12:42pm Wed 20 Jun 2012   Share   Quote   Permalink   Like   Dislike   OK. I was just reading about operation twist. Also, Europe instabilities are likely to drive rates down too, so I'm thinking that they will go down this summer for that reason as well. 3% is pretty low though. Right now on amerisave for my region, the advertise 3.25, but I'd have to pay $8K to get it. For a break even refinance (they give back about $1500 to pay for appraisal and other fees), the rate is 4.0%. It used to be 3.875%. That is non-fha.

9. pazuzu Follow Befriend 6 threads 198 comments

   9   12:42pm Wed 20 Jun 2012   Share   Quote   Permalink   Like   Dislike   The banksters are truly desperate. The debt serfs can't take on enough new debt to keep the game going. Only question, can TPTB hold back the implosion until after the election?

10. YesYNot Follow Befriend (2) 15 threads 430 comments Reston, VA

    10   12:45pm Wed 20 Jun 2012   Share   Quote   Permalink   Like   Dislike   I don't know what the servicers get to charge, but it should be pretty small. Setting up a computer system to collect payments is basically free. A 1/4 point service fee on a $200K loan would be $500 / yr or $42 per payment. For that rate, the 'service' ought to include more than taking a payment.