If you can swing the interest, buy low with high interest, let rate go down by 2024 and then refi. This may be the best but somewhat risky path.

Medaggie said:

---

If you can swing the interest, buy low with high interest, let rate go down by 2024 and then refi. This may be the best but somewhat risky path.

---

Sure.

The point is the average person and investor isn't going to be able to swing 2x-3x or more interest for something. Or more importantly they won't get approved to do so.

Medaggie said:

---

If you can swing the interest, buy low with high interest, let rate go down by 2024 and then refi. This may be the best but somewhat risky path.

---

Most of our clients are taking 10/1 ARMs at 5% for owner occupied because of the delta between that and fixed rates. On investment property deals they're taking the 10/1 ARM at 5.5% figuring they'll be making repairs by then and will probably be turning over their inventory.

Is there not a financial product that would allow the buyer of a home to take on the existing much lower rate/loan of the seller? Seems like it would be a win win for buyer / seller and whomever would take fees for processing such a transaction.

I'm not an advisor. Our average mortgage loan size is $970K so the people taking this option are pretty financially savvy.

We talk about the scenarios in the event they keep the house. If the market is lower they'll benefit with a lower rate in year 11. If rates are 14% they're capped at start rate plus 5%.

A financial advisor from this board just locked in and is saving $700/month over the fixed option. That's $84K over time which is a pretty hefty premium to insure what your rate will be in 2032 if you don't believe you'll still own the house or may have refinanced for any of a variety of reasons.

Someone started a thread about is everyone in debt. I replied with some experience with people who are. They aren't included in this average mortgage loan size because they can't qualify.

Just "how risky" is a 10 year arm at a much better rate than fixed? I fear I wasn't counseled sufficiently...

harge57 said:

---

Is there not a financial product that would allow the buyer of a home to take on the existing much lower rate/loan of the seller? Seems like it would be a win win for buyer / seller and whomever would take fees for processing such a transaction.

---

I think FHA loans can be "assumed". Most others can not be transferred to a new buyer.

https://www.investopedia.com/terms/a/assumablemortgage.asp

harge57 said:

---

Is there not a financial product that would allow the buyer of a home to take on the existing much lower rate/loan of the seller? Seems like it would be a win win for buyer / seller and whomever would take fees for processing such a transaction.

---

Assuming the note is not a win for the seller in like 99.5% of transactions. At all. Unless they buyer made a cash payment for equity agreed to above the note assumption.

2wealfth Man said:

---

think our property tax values will follow

---

no

I do wonder what will happen to high end residential developments at ski resorts and beaches. Interest rates have to really slow demand, right?

https://fortune.com/2022/10/03/housing-market-wall-street-home-prices-predictions-moodys-goldman-sachs-morgan-stanley-fitch-ratings/

Correction is coming (the question is still how MUCH correction).

chris1515 said:

---

harge57 said:

---

Is there not a financial product that would allow the buyer of a home to take on the existing much lower rate/loan of the seller? Seems like it would be a win win for buyer / seller and whomever would take fees for processing such a transaction.

---

I think FHA loans can be "assumed". Most others can not be transferred to a new buyer.

https://www.investopedia.com/terms/a/assumablemortgage.asp

---

Long ago FHA loans could be assumed, but not since the 80's.

I bought in August 2021 with a 2.75% interest rate. Due to work, I may have to sell and move within the next year. Hoping the BCS market is resilient and things don't get too grim.

I think we are pulling our house. Too much crap going on and we aren't desperate to move.

We haven't even received a single low ball offer. That's amazing to me. NOTHING is moving in our area.

Money Printer is coming. House prices will not fall that much.

ElephantRider said:

---

I bought in August 2021 with a 2.75% interest rate. Due to work, I may have to sell and move within the next year. Hoping the BCS market is resilient and things don't get too grim.

---

Same. Refinanced in 2021 at 2.5%.

As I told my wife, be glad we consider this our last house until retirement. Because there's a good chance rates may never be that low again in our life based on historicals. Especially when then historical average of around 5% essentially means about a third more cost on a mortgage.

exp said:

---

Money Printer is coming. House prices will not fall that much.

---

Why? Why would it make any sense to print more money right now?

zagman said:

---

I'm not at all against ARMs or implicating that you're misleading clients. But there's a good chance the minimal savings now aren't going to mean much when they have to refinance at rates potentially double where they are now, or sell at values significantly lower than they are now.

Of course anything can happen. And 10 years is a long time. But it's still a huge risk in one of the most tumultuous financial horizons and weakest sustained economic conditions we've seen in decades. And for what?

---

They don't have to refinance. The loans have 30 year maturities and have a cap of start rate plus 5%. They could also go down in 10 years. I'm just sharing what the majority of people I talk to choose to do given the numbers. I'm happy to show anyone all the options but when you have an option under 5% a lot of people a lot smarter than me are taking it.

It's essentially a bet that the interest rates are going to fall and they'll just refi to something better later later. What, if any, is the prepay penalty on it?

There isn't any. The typical homeowner stays in a house less than 10 years or has refinanced before 10 years. A lot of people who make significant bonuses pay that down on the loan annually and have it paid off in 6-8 years, Not suggesting it's for everyone but it's something a lot of posters here have taken advantage of.

If rates fall you don't refinance. You just go down to current market.

YouBet said:

---

I think we are pulling our house. Too much crap going on and we aren't desperate to move.

We haven't even received a single low ball offer. That's amazing to me. NOTHING is moving in our area.

---

Rent it out, brother!

AgLA06 said:

---

Sims said:

---

htxag09 said:

---

Maybe I'm in the minority. But I would prefer to buy at the higher rate. Either way, I'm not necessarily pushing my approval limit. So bring the higher rate, assuming it pushes prices down, and hopefully I can refinance in a few years at a lower rate. Win/Win

---

Marry the house, date the rate.

---

That's nice.



The last time this happened rates were above 10% for almost 15 years. That's like 2-3 marriages for a lot of people. Dating not so much. Especially when that date costs you 2X-4X what it did in 2021.

---

Well that sure made me laugh!

txaggie_08 said:

---

exp said:

---

Money Printer is coming. House prices will not fall that much.

---

Why? Why would it make any sense to print more money right now?

---

Because if they don't the USA will default on it's debt. The current Fed actions are a show that will be cancelled soon to literally save the global us Treasury based fiat financial system from collapsing.

Sea Speed said:

---

YouBet said:

---

I think we are pulling our house. Too much crap going on and we aren't desperate to move.

We haven't even received a single low ball offer. That's amazing to me. NOTHING is moving in our area.

---

Rent it out, brother!

---

Yeah, I know, but we have larger stuff going on in life all of a sudden.

I left retirement and started a new job and wife is now changing directions as well. Neither of these were in play when we went on market so dynamic totally different for us now.

Are y'all not moving now?