Interested to get the board's feedback. I'm on year 2 of a 5/1 ARM that starts at 2.5% and caps at 8.5% with a 2% potential increase/year. Currently tied to Libor. Would consider another ARM or a fixed 30 year, but goal is basically to pay as little as possible right now while minimizing interest and taking the delta and putting it into the market. So, given that, seems like with ~2.5k in closing costs, I could realistically get around a 3% 30 year fixed, which wouldn't break even for another 5+ years, best case. Not worth it, right?

Thanks for the input. A friend put me in touch with a guy, and it sounds like he can get me 2.75% for a 30 yr with no points. Currently exploring this further.

Can you email me that lenders info for the 2.75?

Willmitchell87 at gmail

It's a good friend playing up a relationship of his so I don't have the contact's info yet. We're going to talk tomorrow to confirm all the numbers and see what we can make stick.

I can do 2.75 on the right loan. My contact info is in my profile

What are cash out rates looking like for investment properties?

I know they weren't great the last couple months..

$200-215k value, ~$60k remaining on current mortgage.

Ugly. Hold off for now.

That's what I figured. Any thing in the crystal ball for when it'll get better and what rates should look like?

Nope. I learned the hard way in 2004 not to predict rates. Period. Full stop. I offer market, if it makes sense, do the transaction.

If I could predict market l this reply would be from me on a beach in Hawaii with a tootsie fruit drink in hand. Under an umbrella

Do second home purchases get these types of rates? Been pondering being a landlord for a while, low rates are tempting.

62strat said:

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Do second home purchases get these types of rates? Been pondering being a landlord for a while, low rates are tempting.

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I am now curious about this as well...

Donald,

I am doing cash out investment properties in the mid's 3's with 1% discount. You do have to pay the discount or else you can not even get it done but feel free to shoot me a note.

True second homes do get the same rate as a primary but that is for vacation homes. You mentioned landlord so I assume you are talking about investment properties which do have a 1/2 point or so higher, but still incredibly low.

https://www.housingwire.com/articles/average-u-s-mortgage-rate-falls-below-3-for-the-first-time/

Quote:

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The average mortgage rate fell to 2.98% this week, breaking the 3% threshold for the first time, as investors concerned about a resurgence of the COVID-19 pandemic fled to the safety of the bond markets and the Federal Reserve continued to scoop up securities backed by home loans.

The average rate for a 30-year fixed mortgage fell to the lowest in almost five decades of data, down from 3.03% last week, Freddie Mac said in a statement Thursday. The average 15-year rate fell to 2.48%, the lowest in a data series going back almost 30 years, according to the mortgage financier.

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Chart : https://www2.optimalblue.com/obmmi/

How are HELOC rates? Is that worth considering vs cash out of pocket?

I think when I checked a year or so ago they weren't that great.

HELOCs are a totally different loan program and are sold mostly at the local bank/credit unions. They have different regulations and priced differently the residential mortgage. Loan offers are all over the map. Shop it.

Freddie report is a lagging indicator usually a week old. They also bury about a half point in discount.

Thanks!

I closed on a refinance yesterday using Tom Sawyer per your recommendation. Got 15 years at 2.25%. Very happy with Tom and his staff - very smooth and easy. Thanks!

Closing costs?

Approx $3900. Little higher than I wanted but the interest savings made it more than worth it for us.

I got 2.7% locked in. Should close soon. I decided to not lose any time so I did a 26 year. Saves $130 a month.

Closing costs were about $1200, not counting reimbursable stuff.

john32f said:

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Interested to get the board's feedback. I'm on year 2 of a 5/1 ARM that starts at 2.5% and caps at 8.5% with a 2% potential increase/year. Currently tied to Libor. Would consider another ARM or a fixed 30 year, but goal is basically to pay as little as possible right now while minimizing interest and taking the delta and putting it into the market. So, given that, seems like with ~2.5k in closing costs, I could realistically get around a 3% 30 year fixed, which wouldn't break even for another 5+ years, best case. Not worth it, right?

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Any thoughts on this?

You haven't provided enough information to give a true comparison of the two options, but I don't believe you're going to break even by year 5 by refinancing to a 3% rate as that would require interest rates to get to a point that would destroy the housing market.

crowag said:

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I closed on a refinance yesterday using Tom Sawyer per your recommendation. Got 15 years at 2.25%. Very happy with Tom and his staff - very smooth and easy. Thanks!

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so he isn't a mean, mean guy?

any points on that?

Diggity said:

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any points on that?

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No points. Also, no appraisal required due to 50% equity in home. Tom looked for ways to reduce fees - not typical for a mortgage broker.

Anyone use Tom for a jumbo? Worth contacting?

Stive said:

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I bleed maroon said:

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Diggity said:

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any points on that?

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No points. Also, no appraisal required due to 50% equity in home. Tom looked for ways to reduce fees - not typical for a mortgage broker.

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How would they know there was 50% equity without the appraisal?

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Exactly. Current mortgage has the value at 60% higher than proposed loan amount, Travis County Appraisal District has the valuation at 58% higher than proposed loan amount. So it's a pretty safe bet. Of course, neither is a binding appraisal, but he got the underwriters to waive the requirement, saving me money in closing costs. I give him kudos for that.

gunan01 said:

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Anyone use Tom for a jumbo? Worth contacting?

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The jumbo market is seriously out of whack since COVID-19 hit - have Tom explain it to you. It was worthwhile for me to put extra money down to a conforming loan to avoid abnormally high jumbo rates. Jumbo rates where they are would have made refinancing a non-starter for me.

Mortgage Originators do not in anyway whatsoever control which loans get appraisal waivers. Never have and never will. Even the lender has no control over this process. It is strictly a Fannie/Freddie decision. Period.

Those entities control them through built in algorithms in their systems. I assume they use the millions of data points they collect. We input the data of your file and they render a decision. That is it. We can manipulate the data input to a small degree and can influence the output and we all do. But there is only so much we can do.

Was gonna say, it's a stated appraisal and FHLMC/FNMA will give a confidence score based upon available valuations in the area, if the stated value is within a certain confidence intervals (standard deviation of value essentially) they will accept the value as valid and issue an inspection waiver. He didn't convince your underwriter to do anything, he played with your stated value enough until it cleared. Your loan approval is, mostly, not up to a human person anymore and hasn't been for some time. Especially not if you don't have some kind of weird income, and even then it's the underwriter's interpretation of the guidelines rather than the underwriter's own decision.

It's why when you shop rates you're mostly just shopping rates, especially on a refi. There's variability in process speed, but if you don't have a hard and fast deadline and they can get you done within their lock period (and if you have W2 income and clear title they should) then any kind of talking their doing other than costs and rates is mostly noise.