The wife and I are building a home that I'll have to roll into a permanent mortgage around May-July 2023. I'm hoping we don't get priced out if the rates skyrocket. Any guesses on where you think they'll be around that time and why?

Are you carrying the construction financing? If so you could have locked in before construction began.

I would guess 5%.

I'm going over.
Rates are already pushing 4 with 6-7 more increases coming with possible a couple .50 point moves.

6.5%.

10YR UST is currently at 2.30% and JPOW has messaged that he wants the Feds fund rate closer to 2.00% vs the current 0.25-50% it's at now by the end of this year and 2.75% by end of 2023.

So let's shoot for 2.25-2.50% by the middle of 2023. That's 2.00% ahead of what we are now. Average interest rate right now is 4.5-4.6% or so. Add 2% to that and you're looking at 6.5%.

The 10YR US treasury yield is what fixed rates are typically built off of. So if the market is expecting at least 2% to be added this year by the Fed - it's not hard to see a 4% 10YR UST coming with it as bond holders look for better yield in a rising inflation environment.

Of course I could be wrong - For I am a simple realtor from a background in capital markets and have had some recent deals go sideways because of rising rates

Prosperity Bank Jumbo Loan was at 3.75% last week, no points, one time close.
Construction loan, transitions to 30 year, 18 month to build, interest only until completion.

I'll gladly eat crow next year if it is 6.5%. The fed can increase without exact mortgage rate increases.


That would fully bankrupt the USA. It would be worse than April 2020. The majority of net worth is in ones house.

Same. I've actually been using just over 5% for my investors, just to go with worst case. Granted, I'm working with a much shorter time span for transaction, and their pre-approval locked rate will expire two months after closing if I do my job right

As rates change, I'll adjust my "holy crap, you have $44k in credit card debt" rates

Well the lender I am doing my construction loan with is offering me a 12-month lock for .75% of the price of the loan. That would roughly come to a bit over $7k due upfront. She says it would be about half a point higher than current rates, so I am thinking about it. Seems worth it if I think rates could go 6.5% or even higher. They would also extend the maturity date if the house needs more time to complete. I will also check with another lender I do business with for refinancing the loan and see what they say.

I really appreciate the discussion from everyone. I know we cannot predict the future but I find it all very interesting to discuss.

What is your construction rate?

In the past i have developed for myself and used my construction rate as a mini-perm. Holding the construction rate until i saw a suitable exit plan on refinance.

Depending where you are in the construction process you could still refinance out of the construction loan now with a one time close and your mortgage would close simultaneously.

I believe the construction rate is 4.5% and the haven't poured yet because they're still waiting on the HOA architectural board to approve the plan, which they will. So far I think I'll look into the 12-month lock starting sometime this summer when framing begins. Unless I find another option I don't know of yet.

If you're interested in closing your mortgage simultaneously with your construction and before you start construction my email is on my profile.

I have already closed on the construction loan and the house is about to begin the lot clearing fairly soon. I will speak to my lender in the summer and likely shoot an email to jja79 at that time. I feel like since I already closed on the loan (and it was expensive) that I am too far in with the current situation. I still own my current home in South College Station and plan to sell next spring before I close on this build, so right now my LTV is pretty high until I sell my existing home.

Have you considered selling your south CS home now with a leaseback to next spring? Obviously don't know the situation with your current home but could be an option to ease your LTV, place the onus of property management on the owner, and provide you with some cash. If you're interested, let me know. I know I've got investors interested in the south CS area

I had not considered a leaseback yet. I was planning on giving TexAgs users with an Agtag a private shot at it in the fall to see if anyone would want to do a sale by owner. Then they could avoid the crazy nature of the current the real estate marketplace that is only predicted to get worse, which I suppose is finally good for me. That is why I am building, I got very lucky to get a couple of lots before they hit the market. I was getting outbid for everything and was very worn down by the bidding wars.

My house was built by Blackstone in 2019, in like-new condition and is 3612 sqft. House right around the corner from me just sold in a couple of days with an asking price of $725,000 and that house is 3735 sqft.

I am thinking my build will hopefully be done between April-July 2023 and I will start looking for the spring buyer in the late fall around November. At least that is my plan for now, but things seem to change constantly in today's age.

The fed rate's recent peak was 2.5% in 2018. The 10 yr hit 3. The mortgage rates hit 5%.

If interested in the leaseback situation we buy those ourselves as opposed to assigning the contract, love to chat with you as it is a solution for folks building.

I certainly don't mind hearing you guys out about the leaseback option. For the right deal I'd be willing to bypass the official listing and do a private sale. My realtor claims I would have a bidding war on my hands for the house, but there are definitely pros and cons to listing it that way. I've got a lawyer that did my last private sale for me before with property and it was very easy and painless. What is the best email address I can reach you both at?

I'll cede to Jay on this one. Sounds like his setup is tailored more to what you're looking for

TheHoneybadger said:

---

The wife and I are building a home that I'll have to roll into a permanent mortgage around May-July 2023. I'm hoping we don't get priced out if the rates skyrocket. Any guesses on where you think they'll be around that time and why?

---

here's my pick 4.27%

LMCane said:

---

TheHoneybadger said:

---

The wife and I are building a home that I'll have to roll into a permanent mortgage around May-July 2023. I'm hoping we don't get priced out if the rates skyrocket. Any guesses on where you think they'll be around that time and why?

---

here's my pick 4.27%

---

They will be that level by September

TheHoneybadger said:

---

I certainly don't mind hearing you guys out about the leaseback option. For the right deal I'd be willing to bypass the official listing and do a private sale. My realtor claims I would have a bidding war on my hands for the house, but there are definitely pros and cons to listing it that way. I've got a lawyer that did my last private sale for me before with property and it was very easy and painless. What is the best email address I can reach you both at?

---

What neighborhood is your current home located in? We have been lot shopping, and are growing tired of it

It is in Castlegate II, about a 5-minute drive from the main part of South College Station. I 100% understand that shopping fatigue in the market, we went through the same thing. I just posted a new thread to gauge interest and see where I am at for an early deal. I listed a few house detains on the thread and if you would like to see pictures and speak via email, please let me know. Thank you.

FYI, I just added a picture link on the other thread if you're interested to see the house pics.

TheHoneybadger said:

---

FYI, I just added a picture link on the other thread if you're interested to see the house pics.

---

Appreciate it, house looks awesome! We live in duck haven, so looking for a an acre or more. GLWS!