Got FICO? Posted October 1, 2006 Report Share Posted October 1, 2006 My husband is an insurance salesman and he got an email the other day that interest rates would be dropping. He deals with annuities and other things but is that also going to apply to mortgage rates?Any takers............ Link to comment Share on other sites More sharing options...
jq26 Posted October 1, 2006 Report Share Posted October 1, 2006 Its up in the air. Rates on treasury notes have plummeted since Bernanke stopped raising the Fed overnight lending rates about two months ago. Mortage rates have also come down a bit since they tend to track bonds (see Bloomberg for yield curves and T-note tracking). Interestingly, the drop in rates has not sparked much of a rebound for purchasing homes, which is not a good sign. The longer trend is that the recent data has indicated that the the economy has cooled off fairly rapidly and commodities have turned south, suggesting the Fed may have to drop rates sometime in '07- and mortgage rates are moving lower to adjust for this. Since no one really "sets" mortgage rates and they are supply and demand driven (and decreasingly influenced by Fed actions), no one can say for sure. My guess is that they will bounce around +/- one point of where they are now through 2007. Though there are many factors, there are two big ones that come to mind right now. If housing weakens substantially, look for rates to drop. If oil and commodity prices start to rise again, look for rates to trend up. Link to comment Share on other sites More sharing options...
Stainless_Steel Posted October 5, 2006 Report Share Posted October 5, 2006 I know there is alot of things to factor in when considering mortgage rates going up or down. So how will yesterday effect mortgage rates? Oil is at its low for the year at $59 a barrel, Stock market broke record from 2000, and housing continues to go down hill. What will happen to mortgage rates when and if the Feds drop interest rates and the housing market is still doing bad? The reason I ask is because I'm looking at houses right now and I can purchase when I find one I like, but I want to get a good rate. Right now it looks like it would be 6.275%. I don't want to buy now 6 months from now the rates be below 6%. I know some may say that's not a big difference in payments, but over the life of the loan it is (to me any way). Link to comment Share on other sites More sharing options...
Got FICO? Posted October 6, 2006 Author Report Share Posted October 6, 2006 Stainless Steel, I agree with you, even a quarter of a percentage is a big deal and not only only the lifetime of the loan but for the short haul. Forty or Fifty dollars is a tank of gas, water/garbage or cable bill. That's a lot of money to some of us especially when you have to budget and pinch pennies.I too want to buy a house but I think that it's just going to be a gamble, you can always refinance later. Link to comment Share on other sites More sharing options...
jq26 Posted October 8, 2006 Report Share Posted October 8, 2006 Mortgage rates have dropped over the fast few months. The FED has less and less control over long term mortgage rates. You are asking to speculate on 10 different macroeconomic factors that affect rates and then ask someone to suggest when you buy so that you can time the very bottom of the market. Its virtually impossible! If you buy at 6.275% and next month they are 6%, there is nothing you can do. Be happy about that- that will help drive up the price of your home and increase your equity and you still have a decent rate. But if you don't buy, you risk rates at 7+%. Then what do you do? Keep waiting? Rates are very good, especially aftre the last two months, and the housing markets has softened. If you are planning on living in the home, there is no time like now. Rates have been very good and you may have leverage to negotiate with the seller on price and closing costs in this buyer's market. Both are important. If you can shave 20k off the price that may be equal to $100 month, which is better than the $40 savings from a potential 1/4 point interest rate drop. Link to comment Share on other sites More sharing options...
PolarBearnCO Posted October 8, 2006 Report Share Posted October 8, 2006 I know there is alot of things to factor in when considering mortgage rates going up or down. So how will yesterday effect mortgage rates? Oil is at its low for the year at $59 a barrel, Stock market broke record from 2000, and housing continues to go down hill. What will happen to mortgage rates when and if the Feds drop interest rates and the housing market is still doing bad? The reason I ask is because I'm looking at houses right now and I can purchase when I find one I like, but I want to get a good rate. Right now it looks like it would be 6.275%. I don't want to buy now 6 months from now the rates be below 6%. I know some may say that's not a big difference in payments, but over the life of the loan it is (to me any way).I agree with the some...0.25% isnt' a HUGE deal. I'm going to assume your interest is tax deductible at the 25% bracket and you pay 5% state income tax, so effectively, that 0.25% is really only 0.175%. On a $250,000, 30-yr loan, that 0.175% is less than $7000 additionally over the life of your loan.For $7000, I'd lock into a rate now. They might not be as low as you can get in a year, but at the same time... maybe they will. Historically, today's rate is VERY, VERY, VERY low. My parents were paying 12% when we bought our first house in the mid-80s. My sister and her husband are paying 8%, and they bought about four years ago. If you can get near-six, then do.(only my opinion) Link to comment Share on other sites More sharing options...
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