Mortgate Rates falling?

[enron_by_the_sea]

HLS:

What about 5/1 hybrid ARM for, say 400K? I currently have one at 5%. Wondering if need to get prepared for refi some time soon.

[HLS]

ARMS have higher rates than 30 YR fixed now.
No longer makes sense.

Jumbo market over $417K is about 6% right now.
Only about 2 weeks left to fund for FNMA.
They stop buying them Dec 31st, unless there is an extension.

Conforming amount for San Diego county should be $556K starting January 1st, but new guidelines aren’t available yet.

It looks like anything over $556K could be 8%+ in January, unless some new programs kick in.

[HLS]

ARMS have higher rates than 30 YR fixed now.
No longer makes sense.

Jumbo market over $417K is about 6% right now.
Only about 2 weeks left to fund for FNMA.
They stop buying them Dec 31st, unless there is an extension.

Conforming amount for San Diego county should be $556K starting January 1st, but new guidelines aren’t available yet.

It looks like anything over $556K could be 8%+ in January, unless some new programs kick in.

[HLS]

ARMS have higher rates than 30 YR fixed now.
No longer makes sense.

Jumbo market over $417K is about 6% right now.
Only about 2 weeks left to fund for FNMA.
They stop buying them Dec 31st, unless there is an extension.

Conforming amount for San Diego county should be $556K starting January 1st, but new guidelines aren’t available yet.

It looks like anything over $556K could be 8%+ in January, unless some new programs kick in.

[HLS]

ARMS have higher rates than 30 YR fixed now.
No longer makes sense.

Jumbo market over $417K is about 6% right now.
Only about 2 weeks left to fund for FNMA.
They stop buying them Dec 31st, unless there is an extension.

Conforming amount for San Diego county should be $556K starting January 1st, but new guidelines aren’t available yet.

It looks like anything over $556K could be 8%+ in January, unless some new programs kick in.

[HLS]

ARMS have higher rates than 30 YR fixed now.
No longer makes sense.

Jumbo market over $417K is about 6% right now.
Only about 2 weeks left to fund for FNMA.
They stop buying them Dec 31st, unless there is an extension.

Conforming amount for San Diego county should be $556K starting January 1st, but new guidelines aren’t available yet.

It looks like anything over $556K could be 8%+ in January, unless some new programs kick in.

[barnaby33]

The biggest riddle to me is the 3-month at 10 basis points. I mean you can still get 2-3 percent in a ultra short term federally insured bank CD.

Only under FDIC limits. Pension funds and foreign CBs are much larger purchasers.

Not that I’m suddenly turning inflationist or anything, but Itulip makes the interesting point that the bond market often gets it wrong for the long term.
Josh

[barnaby33]

The biggest riddle to me is the 3-month at 10 basis points. I mean you can still get 2-3 percent in a ultra short term federally insured bank CD.

Only under FDIC limits. Pension funds and foreign CBs are much larger purchasers.

Not that I’m suddenly turning inflationist or anything, but Itulip makes the interesting point that the bond market often gets it wrong for the long term.
Josh

[barnaby33]

The biggest riddle to me is the 3-month at 10 basis points. I mean you can still get 2-3 percent in a ultra short term federally insured bank CD.

Only under FDIC limits. Pension funds and foreign CBs are much larger purchasers.

Not that I’m suddenly turning inflationist or anything, but Itulip makes the interesting point that the bond market often gets it wrong for the long term.
Josh

[barnaby33]

The biggest riddle to me is the 3-month at 10 basis points. I mean you can still get 2-3 percent in a ultra short term federally insured bank CD.

Only under FDIC limits. Pension funds and foreign CBs are much larger purchasers.

Not that I’m suddenly turning inflationist or anything, but Itulip makes the interesting point that the bond market often gets it wrong for the long term.
Josh

[barnaby33]

The biggest riddle to me is the 3-month at 10 basis points. I mean you can still get 2-3 percent in a ultra short term federally insured bank CD.

Only under FDIC limits. Pension funds and foreign CBs are much larger purchasers.

Not that I’m suddenly turning inflationist or anything, but Itulip makes the interesting point that the bond market often gets it wrong for the long term.
Josh

[stockstradr]

Laugh if you want, but….

We’re now shopping for a home in Silicon Valley.

However, since we’re only going in with 10% down, mortgage rates are far more important to us than the concern of home values continuing to fall some additional (hopefully moderate) amount.

I still believe (opinion expressed at least six month ago on here) that after we move through this deflationary recession, then next comes a period of transition to very high inflation, which I’m defining as 10% or above CPI. So probably within a few years I see mortgage rates well above 10%. The smart move is to buy heavily discounted homes using a fixed rate loan and get help from high inflation to make future loan payments with dollars worth less and less each year.

I know investors that are already VERY cash-flow-positive on homes they bought within the last six months and are now renting, particularly in the outlying run-down areas of the Bay Area. We are talking about homes that are discounted 60% to 70% off peak values, located in Oakland, Stockton, Richmond. In many cases they got the properties approved as Section 8; then the majority of the monthly rent check arrives in the mail direct from the government (= US Taxpayers). The Section 8 tenant only has to pay a fraction of the rent. The illegal immigrants run the scam of getting their rent paid by US Taxpayers because the immigrants work for cash income “off the clock” apparently staying within the poverty guidelines making them eligible for Section 8. Then the investors who own the properties get in on the scam by collecting the Section 8 rent payments direct from the government. America: what a country! (a country built upon scams built upon scams…but the house of cards seems to finally be tumbling down!).

You think those investors give a shit if those rental properties fall another 15% in value? They don’t care because they are significantly cash-flow positive, so now they just sit back and let the renters pay rent for twenty years (and pay off the mortgage!)

[stockstradr]

Laugh if you want, but….

We’re now shopping for a home in Silicon Valley.

However, since we’re only going in with 10% down, mortgage rates are far more important to us than the concern of home values continuing to fall some additional (hopefully moderate) amount.

I still believe (opinion expressed at least six month ago on here) that after we move through this deflationary recession, then next comes a period of transition to very high inflation, which I’m defining as 10% or above CPI. So probably within a few years I see mortgage rates well above 10%. The smart move is to buy heavily discounted homes using a fixed rate loan and get help from high inflation to make future loan payments with dollars worth less and less each year.

I know investors that are already VERY cash-flow-positive on homes they bought within the last six months and are now renting, particularly in the outlying run-down areas of the Bay Area. We are talking about homes that are discounted 60% to 70% off peak values, located in Oakland, Stockton, Richmond. In many cases they got the properties approved as Section 8; then the majority of the monthly rent check arrives in the mail direct from the government (= US Taxpayers). The Section 8 tenant only has to pay a fraction of the rent. The illegal immigrants run the scam of getting their rent paid by US Taxpayers because the immigrants work for cash income “off the clock” apparently staying within the poverty guidelines making them eligible for Section 8. Then the investors who own the properties get in on the scam by collecting the Section 8 rent payments direct from the government. America: what a country! (a country built upon scams built upon scams…but the house of cards seems to finally be tumbling down!).

You think those investors give a shit if those rental properties fall another 15% in value? They don’t care because they are significantly cash-flow positive, so now they just sit back and let the renters pay rent for twenty years (and pay off the mortgage!)

[stockstradr]

Laugh if you want, but….

We’re now shopping for a home in Silicon Valley.

However, since we’re only going in with 10% down, mortgage rates are far more important to us than the concern of home values continuing to fall some additional (hopefully moderate) amount.

I still believe (opinion expressed at least six month ago on here) that after we move through this deflationary recession, then next comes a period of transition to very high inflation, which I’m defining as 10% or above CPI. So probably within a few years I see mortgage rates well above 10%. The smart move is to buy heavily discounted homes using a fixed rate loan and get help from high inflation to make future loan payments with dollars worth less and less each year.

I know investors that are already VERY cash-flow-positive on homes they bought within the last six months and are now renting, particularly in the outlying run-down areas of the Bay Area. We are talking about homes that are discounted 60% to 70% off peak values, located in Oakland, Stockton, Richmond. In many cases they got the properties approved as Section 8; then the majority of the monthly rent check arrives in the mail direct from the government (= US Taxpayers). The Section 8 tenant only has to pay a fraction of the rent. The illegal immigrants run the scam of getting their rent paid by US Taxpayers because the immigrants work for cash income “off the clock” apparently staying within the poverty guidelines making them eligible for Section 8. Then the investors who own the properties get in on the scam by collecting the Section 8 rent payments direct from the government. America: what a country! (a country built upon scams built upon scams…but the house of cards seems to finally be tumbling down!).

You think those investors give a shit if those rental properties fall another 15% in value? They don’t care because they are significantly cash-flow positive, so now they just sit back and let the renters pay rent for twenty years (and pay off the mortgage!)

[stockstradr]

Laugh if you want, but….

We’re now shopping for a home in Silicon Valley.

However, since we’re only going in with 10% down, mortgage rates are far more important to us than the concern of home values continuing to fall some additional (hopefully moderate) amount.

I still believe (opinion expressed at least six month ago on here) that after we move through this deflationary recession, then next comes a period of transition to very high inflation, which I’m defining as 10% or above CPI. So probably within a few years I see mortgage rates well above 10%. The smart move is to buy heavily discounted homes using a fixed rate loan and get help from high inflation to make future loan payments with dollars worth less and less each year.

I know investors that are already VERY cash-flow-positive on homes they bought within the last six months and are now renting, particularly in the outlying run-down areas of the Bay Area. We are talking about homes that are discounted 60% to 70% off peak values, located in Oakland, Stockton, Richmond. In many cases they got the properties approved as Section 8; then the majority of the monthly rent check arrives in the mail direct from the government (= US Taxpayers). The Section 8 tenant only has to pay a fraction of the rent. The illegal immigrants run the scam of getting their rent paid by US Taxpayers because the immigrants work for cash income “off the clock” apparently staying within the poverty guidelines making them eligible for Section 8. Then the investors who own the properties get in on the scam by collecting the Section 8 rent payments direct from the government. America: what a country! (a country built upon scams built upon scams…but the house of cards seems to finally be tumbling down!).

You think those investors give a shit if those rental properties fall another 15% in value? They don’t care because they are significantly cash-flow positive, so now they just sit back and let the renters pay rent for twenty years (and pay off the mortgage!)

[Author]

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