Will mortgage rates under 5% get your attention?

Mortgage rates have fallen unexpectedly below 5 percent again. Will that drive you back into the housing or refi market?

The Wall Street Journal is reporting that the financial turmoil in Europe has caused many international investors to seek a safe haven for their money in the U.S. That has pushed domestic mortgage rates to the lowest levels of the year — and back near 50-year lows, the WSJ reports.

The housing industry had been bracing for a period of rising mortgage rates, triggered by the end of the Federal Reserve’s $1.25 trillion mortgage-securities purchase program.

Instead, the WSJ writes, many in the industry now say rates could drift as low as 4.5 percent this summer from 4.86 percent now, instead of rising to 6 percent as some economists projected. That makes for significantly lower payments for buying homes or refinancing mortgages.

The refinance business “exploded” last week, Jeff Lazerson, chief executive of Mortgage Grader of California, told the WSJ.

Will it explode here? Will the low rates get your attention, whether to refi or buy?

For instant updates, follow me on Twitter.

34 comments Add your comment

The General

May 24th, 2010
8:15 am

Re-fied in 2003 with a 4.75% 15-yr fixed. No closing costs, no fees, nothing. Just signed on the dotted line. I liked it then and I like it now.

redevil

May 24th, 2010
8:17 am

Just bought my first home @ 4.25 fixed over 30yrs. thru SunTrust. Can’t beat it… Loving it..

LPC

May 24th, 2010
8:20 am

Then there are those of us who pay our bills but can’t refi(a 10 yr arm) because we can’t get a decent appraisal, thanks to short sales and foreclosures….

Chase Bank Sucks

May 24th, 2010
8:27 am

I am stuck at 6.75% and have no options. It really sucks for us small business people that drove the economy for the last 20 years and now I can’t get a loan because my house is under water and their is no such thing as a “No Doc” Jumbo anymore.

Morrus

May 24th, 2010
8:42 am

Curiously, in a supposed anti-incumbent year, most of the departing are not retiring but seeking higher office. We may recycle more than we replace. The bad news is that a frustrating 114 seats still have but one contestant. Two of them aren’t even incumbents, meaning they will affect state policy without being vetted by voters. And I have to think that we’d be better off if many had run instead for the Legislature — and cut down on the number running unopposed. Georgia’s problems are numerous. They aren’t going away. There’s too much stale thinking at the Capitol, on both sides of the aisle. New voices would be welcome.

TnGelding

May 24th, 2010
8:42 am

It would if I was in the market, but we have had our mortgage paid off for over 20 years. Yes, we live in a very modest home. I feel for you young folks that got caught up in frenzy. Suck it up and hang in there so you’ll be able to look at yourselves in the mirror years from now. Eventually values will catch up with what you paid again and you probably couldn’t live any cheaper anywhere else. Certainly not in a place you like as well.

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Wanda

May 24th, 2010
10:26 am

Would love to refinance. Does anybody know of a mortgage company that will refinance a mobile home? We really need to refinance. My husband had to take a big cut in pay and we really need to refinance before it is to late.

G.F.

May 24th, 2010
10:35 am

@The General: Who did you refinance with?

Blake

May 24th, 2010
10:48 am

Rates are extremely low as you all know. If you have had trouble getting qualified for one reason or another, definately give me a call. 770-255-3827. I am more than happy to try and assist!

USMC DAWG

May 24th, 2010
10:51 am

@G.F.: You should be able to get a rate of approximately 4% to 4.25% on a 15 year fixed.
@Redevil: You paid discount points for that 4.25% at Suntrust. Suntrust is a fne bank, but they are not the lowest priced bank.
Anyone refinancing a 30 year fixed rate mortgage should be able to get approx. 4.75% (unless a condo, etc.) On a 15 yr fixed you are looking at a rate of approx. 4.25% or lower.
BE SURE YOUR ARE AWARE IF THE LENDER IS CHARGING YOU “DISCOUNT” POINTS TO GET YOU RATE.
(This is all based on having good credit, verifiable income, and a good appraisal, etc.)

Good contact

May 24th, 2010
10:51 am

I recently used First Century Bank. Good medium sized bank that takes a common sense approach. No, I’m not affiliated with them in any way.

USMC DAWG

May 24th, 2010
10:57 am

@Wanda: You can refinance your mortgage through FHA; however, most banks will not touch Doublewides. You need to call around to Mortgage Brokers…NOT BANKS…But mortgage brokers and ask them if they have a lender/bank that will do an FHA loan on a doublewide. Their are still a few lenders that will refinance a “doublewide” mobile home, but they are getting harder to find, so call around to mortgage “brokers” and ask.

USMC DAWG

May 24th, 2010
11:07 am

@ChaseBankSucks: First of all… You are right! Chase does suck. Unfortunately you are going to have to hold on for a little while to get refinanced. THE GOOD NEWS: Jumbo programs are slowly starting to make a comeback. I have noticed many banks in the last three months opening their Jumbo product back up. Hang in there and do what you need to do and when the time is right the self employed “stated” income loan will come back as well.
The problem is that banks got too loose on the stated income programs last decade and had products like the W2(tax return) stated, which is what gave the stated loan the name of a “liars loan”. Self employed people are now having to deal with the “backlash”. I truely believe that a “sensible” stated loan for self employed and commission sales people will come back in a years time.

cheapskate

May 24th, 2010
11:11 am

I hate lawyers – so I use a line of credit instead of the mortgage. It’s a bit riskier but cheaper and I’ve been paying under 4 for a good while now. Plus – no dealing with stupid escrow rules. Couldn’t do this without decent equity though.

Vince Turley

May 24th, 2010
11:21 am

Rates are low and I’m refinancing several people a month. I think the biggest issue is the home values, but I have that narrowed down also because I have a bank that will do a 75 dollar desk appraisal and if the value works then we just pay another 250 dollars to turn it into a full appraisal. I find that customers have the mind set of if it’s 4.75 now it will go to 4.5 so I’m waiting, but if it goes up to 4.875 then the customer is mad and doesn’t want to refinance. Remember “PIGS GET FAT AND HOGS GET SLAUGHTERED” If I can help call me at 678-779-3396 or email me at vturley1@comcast.net Local Ga company.

USMC DAWG

May 24th, 2010
11:22 am

@Cheapskate: That’s not a bad strategy “short term” but a line of credit is a mere “Credit Card” on your home (except you get the mortgage interest write off benefit). Lines of credit have different rules thatn your traditional mortgage, so just be aware that your bank can CHANGE the rules, guidelines, status, etc. on your line of credit at ANY time. Don’t misunderstand me… This strategy might work for you- just know to keep on top of any changes and have a contingency plan if the nbank calls you one Monday morning and says, “we need to change some things on your loan”. I have seen it happen, so just be aware. You sound like a savvy homeowner so this might not be a problem.

Vince Turley

May 24th, 2010
11:27 am

Remember, it doesn’t cost you anything to talk with a BROKER that has over 30 BANKS to place your business. We shop it for you. The banks want to be the only source for you to refinance or purchase a mortgage, and when that happens, your going to pay too much. remember compitetion is always a good thing.

Vince Turley

May 24th, 2010
11:32 am

I have programs for homeowners that the value of their house has moved down under what they bought the house for and the rates are around 5%. If I can help let me know vturley1@comcast.net or 678-779-3396

Scott

May 24th, 2010
12:05 pm

WANDA… I can help you with the refinance of your manufactured home. email me at swisuri@myhsoa.com

redevil

May 24th, 2010
12:09 pm

USMC Dawg.. I understand what you are saying, I was going thru a mortgage broker originally and was given a 5.0 fixed over 30. However, when we found the house we wanted, it happened to be a SunTrust owned property, so they were able to offer me a great rate. My broker didn’t believe it either until she saw the GFE and talked to my SunTrust mortgage official. Even at the closing, the closing attorney took a bouble look, he thought it was for 15 yrs. He told me he’d never seen a lower rate for a 30yr. fixed, told me keep it for a very long time… which I plan to.

USMC DAWG

May 24th, 2010
12:37 pm

@Redevil: That is a really good deal, and I am sure you got an even better deal on the house because it was bank owned. I was merely saying that Suntrust does not offer that rate, even on their wholesale line.
So the general public cannot go get a 4.25% on a 30 year fixed for a home loan. That is great for you though Redevil.

Efinity Mortgage

May 24th, 2010
4:22 pm

The question is not whether interest rates below 5% will get someone’s attention. The question is if they feel compelled to take action on the interest rate (eg buy a home) or wait (eg thinking rates will continue downward). Market data regarding new home starts and inventories suggest a recovery in housing which will increase home prices after inventories of short sales and foreclosures dries up. Potential homeowners could get hit twice – higher home prices due to demand and higher interest rates.

JasonDawg

May 24th, 2010
5:40 pm

My wife and I bought our first house Dec of 2009. It was a foreclosure and we had to use the FHA 203k Loan program since it had damage. We’re in a 30 Year at 5.375%
Anyone know if I’m allowed to refi? I’d love to drop the rate to get a lower payment or maybe a 15yr.

smitty

May 24th, 2010
6:08 pm

are you seriously asking to refi a house bought 6 months ago?

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USMC DAWG

May 25th, 2010
8:03 am

@JasonDawg: The FHA 203k program is an excellent loan. The rates are a little higher than a traditional FHA 203b (standard fha loan). Depending on your loan amount, it probably won’t benefit you enough to refinance at this point. ANd actually 5.375 for a FHA 203k loan is really low. Let me also suggest that if you want a 15yr fixed loan, just make an additional “payment to principal” on your 30yr loan and you can pay it off early (even in 15 yrs). This way you keep your minimum payment low in case you hit any “bumps’ in the road financially. A 15yr loan will give you a higher minimum payment every month, obviously. So why not control what your minimum payment is and pay extra principal to make it a 15 year loan. But your current rate on the type of loan you got is very low. And to answer your question, you can refinance your loan at any time as long as there is a benefit to the borrower(you) ex: lower rate, payment, gets rid of MI, etc.

JasonDawg

May 25th, 2010
11:05 am

@USMC Dawg: Thanks for the info. I wasn’t sure if we were getting a good deal at the time since we were forced to use a specific bank by using that FHA 203k program. But the house had a leak in the master bath and due to the damage no other bank would write a loan for it unless the damage was repaired first. Being a foreclosure that obviously wasn’t going to happen. But I feel better knowing it’s a good rate for that loan. I know to most people it seems crazy to ask about refinancing a loan so soon after purchase.

USMC DAWG

May 25th, 2010
12:23 pm

@JasonDawg: This morning the ten year bond yield went below 3.20 and is currently at 3.16.
Mortgage interest rates are going down “partly” because of this drop. So, your next move IF YOU REFINANCE your loan will be to get an FHA “streamline” refinance. All this means is you will not need as much of the documentation to refinance like you did on this current loan you are in because you are already in an FHA loan. So whether you wait for years to come or look into refinancing in the near future, ask for an FHA “streamline” mortgage. (While I said earlier that it might not make sense to refi, if you can get a 4.5%, it might make sense.) I Hope this helps.

Patrick

May 25th, 2010
3:08 pm

I have a $544,000 mortgage on Lake Lanier that appraised for $720,000 3 years ago. If the appraisal is there, I’m looking to refinance with a 7/1 Arm. Can someone direct me for lowest rate and closing costs.

Patrick

May 25th, 2010
3:09 pm

Enter your comments here

Patrick

May 25th, 2010
3:28 pm

Let me here from you experts. In what year will it be a sellers market?

USMC DAWG

May 25th, 2010
10:32 pm

@Patrick, you should be able to get a rate in the 4’s on a 7/1 ARM. Feel free to call me if you want at 404-233-8308.

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