Mortgage rates

[FireFoley]

We got an offer on the house that we're likely to accept tomorrow at $680k. Not happy about it, but that's what the market is right now. Probably could have gotten full ask if we listed in March, April, or May.

Good luck Hope it goes smoothly. This fits the old adage of when everyone is doing one thing, I usually want to be doing the opposite. So perhaps you did not top tick the market but you are still very close to the beginning of the slow slough down. Maybe this is proof positive by the guy who said a few months ago that anyone who wanted to rush out and overpay for a house had already done so

 

[BMF]

Exactly!…day late and a dollar short…cabin made up for it though…bee happy!

That's what I told my wife, she's more upset about not getting ask than I am. We're just banking this money, so it's a win. We're putting in a pool at the Gulfport house and doing some other things there, so we'll spend some of the cabin money there. I want to see what happens after the eviction moratorium ends. We want to get an airbnb in Gulfport, so that's what we got our eyes on.

 

[LagoonGator68]

That's what I told my wife, she's more upset about not getting ask than I am. We're just banking this money, so it's a win. We're putting in a pool at the Gulfport house and doing some other things there, so we'll spend some of the cabin money there. I want to see what happens after the eviction moratorium ends. We want to get an airbnb in Gulfport, so that's what we got our eyes on.

Be careful of the red tide areas.

 

[BMF]

Mortgage forbearance is about to end for millions of Americans. Here’s why that’s good news for home buyers

 

[BMF]

Still not seeing this reflecting in construction costs.....

Lumber Drops to Nine-Month Low, Extending Retreat From Record

Lumber futures slid to the lowest in more than nine months after sawmills ramped up production and demand from builders stabilized.

September futures in Chicago fell as much as 4.4% to $482.90 per thousand board feet, the lowest for a most-active contract since Oct. 30. Prices have dropped more than 70% from the record high reached just three months ago.

The tumble marks a stark turnaround for the common building material after strong U.S. construction demand during the pandemic spurred a surge in orders for lumber, causing prices to more than quadruple to their May peak and fueling inflation concerns. Sawmills have since increased output, and a shortage of other building supplies such as siding and windows has slowed the pace of construction, said Brian Leonard, an analyst with RCM Alternatives.

 

[FireFoley]

@BMF, I wish your last 2 posts would have an effect on prices, but I am not seeing it. I am seeing prices drop a little down here, but they are at such an elevated level, that the drop is really not much help. Also there is still plenty of people who want to buy a home as soon as it gets into their "affordability" range, which in my opinion will still be way overpriced.

On another front, the CPI today was labeled tame as the acceleration is slowing. The one think they all talked about was how out of whack the housing element of the CPI is and will catch up in the future. But interesting today was another 10yr. Treasury auction. It looked to be going so so until the final results were posted and it was gangbusters good. The yield dropped 6 basis points initially before settling back a bit. Even if or when the FED gets out of the emergency operation business, there is still unbelievable appetites for our debt, so we might not get any help there. Also the Treasury will be issuing less debt next year, so that will keep the appetite up. However if they are able to ram thru this ridiculous gatrillions stimulate package, then we might get some rate reaction.

 

[BMF]

Not sure I agree w/ this article - good points about higher interest rates, but if the market tanks 15-20% (or more), I'd rather buy at a discount price and pay a little bit higher interest rate:

Why waiting until next year isn't a good strategy for frustrated homebuyers

The question is whether the elements will shift in 2022 — to a great enough extent, and in the right direction — to make finding affordable properties more likely for first-time homebuyers.

The answer? Probably not, and here are three reasons why.

1. Interest rates will be higher next year

2. Housing supplies will still be tight in 2022

3. Demand will stay strong

 

[FireFoley]

Not sure I agree w/ this article - good points about higher interest rates, but if the market tanks 15-20% (or more), I'd rather buy at a discount price and pay a little bit higher interest rate:

Why waiting until next year isn't a good strategy for frustrated homebuyers

The question is whether the elements will shift in 2022 — to a great enough extent, and in the right direction — to make finding affordable properties more likely for first-time homebuyers.

The answer? Probably not, and here are three reasons why.

1. Interest rates will be higher next year

2. Housing supplies will still be tight in 2022

3. Demand will stay strong

I am with you about the article. I do agree inventory will still be tight and there is still enough demand as I mentioned that people will still be willing to overpay.

But here is where I have always diverged and where the article does not. when you reach what I consider a top, if interest rates move higher you will get an incremental decrease in prices, b/c each move up in rates takes a lot of people out of the market as has been written. But as you see they use that silly example of a monthly payment based on a change in rates but not a change in price. Hence the article is written from shall I say a "realtor's angle" or a "mortgage angle". It is all based on monthly costs and total debt is never a concern.. In that example yes you are paying much more for the house over time but if a 500K house drops to 400K b/c of a rise in rates, b/c of a smaller loan you still might be able to mirror the monthly payment but b/c of a smaller downpayment, you pay LESS in total over time. Until many people understand and take into account total debt and not just "monthly subscriptions costs", they will have a very difficult time getting ahead.

 

[BMF]

I am with you about the article. I do agree inventory will still be tight and there is still enough demand as I mentioned that people will still be willing to overpay.

But here is where I have always diverged and where the article does not. when you reach what I consider a top, if interest rates move higher you will get an incremental decrease in prices, b/c each move up in rates takes a lot of people out of the market as has been written. But as you see they use that silly example of a monthly payment based on a change in rates but not a change in price. Hence the article is written from shall I say a "realtor's angle" or a "mortgage angle". It is all based on monthly costs and total debt is never a concern.. In that example yes you are paying much more for the house over time but if a 500K house drops to 400K b/c of a rise in rates, b/c of a smaller loan you still might be able to mirror the monthly payment but b/c of a smaller downpayment, you pay LESS in total over time. Until many people understand and take into account total debt and not just "monthly subscriptions costs", they will have a very difficult time getting ahead.

Additionally, most people will never pay off the house - and likely move within 5 to 10 years. So getting the house at a lower price should be more important than getting a lower interest rate.

 

[FireFoley]

Additionally, most people will never pay off the house - and likely move within 5 to 10 years. So getting the house at a lower price should be more important than getting a lower interest rate.

That is correct. Or as Crete would tell you anytime people can refi and save 2 bux a month on a monthly payment even if they have to extend their duration, they are lined up outside his door.

 

[FireFoley]

It just won;t ever end.

https://www.cnbc.com/2021/08/13/us-...uest-to-block-cdc-national-eviction-ban-.html

 

[bradgator2]

Well on some positive news, closed on our refi today. 1.85% 15yr. We had 13 yrs left on an existing 15yr, but if I simply keep making the same payment then it will be paid off in less that 12.

Really silly hoops this time that I have never seen. For example, they asked if we had an HOA. Yes. We need you to show that you are current with your dues. Ok…. So I send in a copy of the statement and then printed out of my bank account where they were drafted. Not acceptable. They needed a letter from the property manager stating we were current. Just several really weird things like that made the process annoying.

 

[FireFoley]

Well on some positive news, closed on our refi today. 1.85% 15yr. We had 13 yrs left on an existing 15yr, but if I simply keep making the same payment then it will be paid off in less that 12.

Really silly hoops this time that I have never seen. For example, they asked if we had an HOA. Yes. We need you to show that you are current with your dues. Ok…. So I send in a copy of the statement and then printed out of my bank account where they were drafted. Not acceptable. They needed a letter from the property manager stating we were current. Just several really weird things like that made the process annoying.

Very nice rate. No reason to pay it off early. Just make the minimum payment and give the vig to your daughter and let her roll the dice in the stock market. She will easily crush it.

With that said I have talked to a couple of people who cash out refi-ed into long duration so as to lower their monthly payment and think it is a 100% certainly that they will crush it in the stock market from here so they took the extra cake. Time will tell

 

[Concrete Helmet]

They needed a letter from the property manager stating we were current.

Estoppel Letter....With e recording lenders are extra wary about getting a lien slipped in front of their position....Your loan will not be funded or recorded for 3 days due to your right of rescission...Stranger stuff happens especially when dealing with scumbag attorneys who run most HOA's.

 

[bradgator2]

Very nice rate. No reason to pay it off early. Just make the minimum payment and give the vig to your daughter and let her roll the dice in the stock market. She will easily crush it.

With that said I have talked to a couple of people who cash out refi-ed into long duration so as to lower their monthly payment and think it is a 100% certainly that they will crush it in the stock market from here so they took the extra cake. Time will tell

Interesting take. I PM’d Concrete in the beginning and he gave the same advice: dont pay anything extra and invest it.

It technically dropped the payment $420 per month.

A big part of me doesn’t like extending it out another 15 years, especially when 11.5 years is easily achievable. It’s really peanuts in interest saved, but I was thinking more about “time”.

 

[bradgator2]

Estoppel Letter....With e recording lenders are extra wary about getting a lien slipped in front of their position....Your loan will not be funded or recorded for 3 days due to your right of rescission...Stranger stuff happens especially when dealing with scumbag attorneys who run most HOA's.

Yeah, I know what it is. They also asked for a utility bill. I am like, “it’s all electronic now…. I havent received a bill in the mail in 8 years”. Well we need one. And then after everything is approved and rolling nicely, they said they know I have been paid again and they also need that paystub. It just never ended. Nothing hard to get, it just got annoying. I honestly thought it might not close. And considering this wasn’t a huge savings for me…. I reached the limit of my annoyed meter. But, everything was signed today so all is good. (As long as it is funded)

 

[Concrete Helmet]

Nothing hard to get, it just got annoying. I honestly thought it might not close. And considering this wasn’t a huge savings for me…. I reached the limit of my annoyed meter.

This is my world 12 hours a day....

 

[CDGator]

Yeah, I know what it is. They also asked for a utility bill. I am like, “it’s all electronic now…. I havent received a bill in the mail in 8 years”. Well we need one. And then after everything is approved and rolling nicely, they said they know I have been paid again and they also need that paystub. It just never ended. Nothing hard to get, it just got annoying. I honestly thought it might not close. And considering this wasn’t a huge savings for me…. I reached the limit of my annoyed meter. But, everything was signed today so all is good. (As long as it is funded)

Do you mind if I ask what kind of closing costs you had? I hate the whole process and paperwork so it really has to be worth it. I’ve checked multiple times but lost steam at the whole thought.

 

[bradgator2]

Do you mind if I ask what kind of closing costs you had? I hate the whole process and paperwork so it really has to be worth it. I’ve checked multiple times but lost steam at the whole thought.

All the classic closing costs were basically $5000. But I also bought points to get that rate, which was another $5000.

That $10,000 made it a difficult decision for me. I was already at a good rate, so we really dont end up saving that much. But, as it currently stands, we have zero intentions of ever leaving this spot. So might as well save whatever we can.

 

[CDGator]

All the classic closing costs were basically $5000. But I also bought points to get that rate, which was another $5000.

That $10,000 made it a difficult decision for me. I was already at a good rate, so we really dont end up saving that much. But, as it currently stands, we have zero intentions of ever leaving this spot. So might as well save whatever we can.

Good to know.
We are in turmoil with what to do next.