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SD Realtor
ParticipantI think there is a substantial amount of relief that will be made by the lenders. I still do not think it will have a significant impact…. remember when you were a kid and you would go to the beach and build a sand wall to withstand the waves?
From the lenders standpoint, we all I think, correctly assume that these guys know what is going on. Thus, they are hoping to smooth the incoming waves out and make it like a slow tide coming in over time. Additionally they can pick and choose which homeowners to throw lifelines to. It makes sense to me that they would save those homeowners who pose LESS of a risk to default. Let the others get carried away by the tide.
Just my guess…
SD Realtor
ParticipantI think there is a substantial amount of relief that will be made by the lenders. I still do not think it will have a significant impact…. remember when you were a kid and you would go to the beach and build a sand wall to withstand the waves?
From the lenders standpoint, we all I think, correctly assume that these guys know what is going on. Thus, they are hoping to smooth the incoming waves out and make it like a slow tide coming in over time. Additionally they can pick and choose which homeowners to throw lifelines to. It makes sense to me that they would save those homeowners who pose LESS of a risk to default. Let the others get carried away by the tide.
Just my guess…
SD Realtor
ParticipantGood post NSR. I agree with it.. However, I can tell you I have seen cases where buyers have backed out because of little swings like that. Yes those cases and far and few between and exceptions to the rule.
One thing though, which again was my intended point of the post. The builders float period is monsterous. Just think about people who signed a purchase agreement in March for a phase that will be completed in June or July. They are pretty screwed right? Also I am sure that neither the sales agent or the preferred lenders loan officer went over different loan payment scenarios based on rate changes. Sometimes deception is made by silence right?
One of the posts recently made was the case of a buyer backing out because of the different payment. Note that I entirely agree with you that the increased payment may not be much… yet it is enough to push the buyer out the door. Now you and I know it really pushed the buyer out the door because the buyer finally realizes it was a bad decision to begin with… not because the buyer has to fork out a little more each month. In these cases, the rate hike is a blessing in disguise.
ParticipantGood post NSR. I agree with it.. However, I can tell you I have seen cases where buyers have backed out because of little swings like that. Yes those cases and far and few between and exceptions to the rule.
One thing though, which again was my intended point of the post. The builders float period is monsterous. Just think about people who signed a purchase agreement in March for a phase that will be completed in June or July. They are pretty screwed right? Also I am sure that neither the sales agent or the preferred lenders loan officer went over different loan payment scenarios based on rate changes. Sometimes deception is made by silence right?
One of the posts recently made was the case of a buyer backing out because of the different payment. Note that I entirely agree with you that the increased payment may not be much… yet it is enough to push the buyer out the door. Now you and I know it really pushed the buyer out the door because the buyer finally realizes it was a bad decision to begin with… not because the buyer has to fork out a little more each month. In these cases, the rate hike is a blessing in disguise.
ParticipantHi Patientrenter –
I guess I will fall back on the line, we agree to disagree. Once more, if I implied that I could predict the performance of the bond market, I didn’t mean to. What I am trying to say is that I would AND do, absolutely look at the yield all the time. It actually dictates my periods of serious looking and making offers verses looking and NOT making offers. Through the winter and spring I did make a few offers (lowballs that all go rejected) on homes I liked. However as of about 3 weeks ago I got chased out because the yield pushed rates beyond my budget (for the price I need to pay to get in the home I want). When the bond market gains some momentum and comes back down then I will start seriously looking again.
Again, I don’t (and I believe have never) ever claim to be able to predict the behavior of the yield. Yet I can honestly say that to have signed a purchase contract in April or May while the yield was trending like it was, AND then float a loan, well… I personally would not have done it, NOR would I have recommended anyone else do it.
Anyone that has seriously spoke to these sales agents at the builders knows how these people work. I believe that the percentage of people who float the rate is staggering, like 90% or something like that. No I don’t have stats but that is from a conversation I had. Think about it, many if not all of the phase releases are WAY in advance of the completion of the home. No lender, preferred or non preferred will lock a loan for that long.
Rustico – On my personal purchases I have never ever floated a loan. I get that sucker locked immediately. So to answer your question, before I even sign a contract, I make sure my mortgage broker has a very precise rate for me. Then I add a fudge factor to see where the rate can move up to in the next few days so that I know EXACTLY what my rate and payment will be. Any mortgage broker will tell you that they receive rate sheets on a daily basis, obviously because they vary with the 10 year. Yet, it is hard to imagine a rate moving more then say 1/4% in two days. That would reflect an extraordinary movement on the market, but we did see that. Anyways, usually to get a lock any more then 45 days is gonna cost you. Any more then that, and I am not sure that it can even be done. I think one time I saw a 90 day lock but it may have been a point or two.
SD Realtor
ParticipantHi Patientrenter –
I guess I will fall back on the line, we agree to disagree. Once more, if I implied that I could predict the performance of the bond market, I didn’t mean to. What I am trying to say is that I would AND do, absolutely look at the yield all the time. It actually dictates my periods of serious looking and making offers verses looking and NOT making offers. Through the winter and spring I did make a few offers (lowballs that all go rejected) on homes I liked. However as of about 3 weeks ago I got chased out because the yield pushed rates beyond my budget (for the price I need to pay to get in the home I want). When the bond market gains some momentum and comes back down then I will start seriously looking again.
Again, I don’t (and I believe have never) ever claim to be able to predict the behavior of the yield. Yet I can honestly say that to have signed a purchase contract in April or May while the yield was trending like it was, AND then float a loan, well… I personally would not have done it, NOR would I have recommended anyone else do it.
Anyone that has seriously spoke to these sales agents at the builders knows how these people work. I believe that the percentage of people who float the rate is staggering, like 90% or something like that. No I don’t have stats but that is from a conversation I had. Think about it, many if not all of the phase releases are WAY in advance of the completion of the home. No lender, preferred or non preferred will lock a loan for that long.
Rustico – On my personal purchases I have never ever floated a loan. I get that sucker locked immediately. So to answer your question, before I even sign a contract, I make sure my mortgage broker has a very precise rate for me. Then I add a fudge factor to see where the rate can move up to in the next few days so that I know EXACTLY what my rate and payment will be. Any mortgage broker will tell you that they receive rate sheets on a daily basis, obviously because they vary with the 10 year. Yet, it is hard to imagine a rate moving more then say 1/4% in two days. That would reflect an extraordinary movement on the market, but we did see that. Anyways, usually to get a lock any more then 45 days is gonna cost you. Any more then that, and I am not sure that it can even be done. I think one time I saw a 90 day lock but it may have been a point or two.
SD Realtor
ParticipantLike I said Rus I have always thought you are a straight shooter and I always respect your opinions. While you and I disagree on what you wrote I don’t view it as an attack or being disrespectful at all. It is what you feel and you presented it a respectable manner.
I believe I wrote at one time, “If we all agreed on everything this forum would suck.”
SD Realtor
ParticipantLike I said Rus I have always thought you are a straight shooter and I always respect your opinions. While you and I disagree on what you wrote I don’t view it as an attack or being disrespectful at all. It is what you feel and you presented it a respectable manner.
I believe I wrote at one time, “If we all agreed on everything this forum would suck.”
SD Realtor
ParticipantHi Patientrenter –
You are quite right that predicting the behavior of the treasury yield is hard to do, pretty much impossible. What I was trying to get at, and which I apparently miserably at doing, was two fold.
1 – I was trying to point out that interest rates on mortgages are not tied to the overnight rate set by the fed. That the mortgage rates set by lenders are based on the bond yield behavior, not the fed, not the fed, not the fed…
2 – Once a potential buyer can accept premise 1, they can very much look at the treasury yield and get an idea of what is going on with mortgage rates. They can look at the behavior of the treasury, they can determine if the overall behavior of treasury is trending up or down, and they can get some sort of feel for which way things are going. More astute buyers can even predict upper and lower bounds on where the treasury yield may be 1 or 2 months out.
Again, if anybody here feels that lenders base mortgage rates on the fed rate, I cannot state how wrong that assumption is. HELOCs maybe, commercial loans yeah… but the main financing vehicles that are used for mortgages we commonly discuss here… those are based on the 10 year.
My point is not to say the 10 year is predictable or that I can predict it… Not in any manner. If I were to make any attempt predict it, well… it looks like over the past few years it (the 10 year yield) is showing higher highs and higher lows. So I would guess (note the words guess) that it will perhaps run up to 5.5 maybe even 5.75 and then it will cycle down.
One other note, as was previously mentioned, and as you very well know, an inversion in the 10 year and overnight rate has predated a recession I believe 6 out of 7 times or something like that. The most recent inversion I believe is unwinding because the recession didn’t occur when many thought it would. Similarly inflation and stronger economic nunbers have “chased” the bond yield up. Anyways I am WAY out of my element in the past 2 paragraphs.
To be simple, noting where the 10 year is at, and where it may go in the near future may save potential buyers alot of money.
ParticipantHi Patientrenter –
You are quite right that predicting the behavior of the treasury yield is hard to do, pretty much impossible. What I was trying to get at, and which I apparently miserably at doing, was two fold.
1 – I was trying to point out that interest rates on mortgages are not tied to the overnight rate set by the fed. That the mortgage rates set by lenders are based on the bond yield behavior, not the fed, not the fed, not the fed…
2 – Once a potential buyer can accept premise 1, they can very much look at the treasury yield and get an idea of what is going on with mortgage rates. They can look at the behavior of the treasury, they can determine if the overall behavior of treasury is trending up or down, and they can get some sort of feel for which way things are going. More astute buyers can even predict upper and lower bounds on where the treasury yield may be 1 or 2 months out.
Again, if anybody here feels that lenders base mortgage rates on the fed rate, I cannot state how wrong that assumption is. HELOCs maybe, commercial loans yeah… but the main financing vehicles that are used for mortgages we commonly discuss here… those are based on the 10 year.
My point is not to say the 10 year is predictable or that I can predict it… Not in any manner. If I were to make any attempt predict it, well… it looks like over the past few years it (the 10 year yield) is showing higher highs and higher lows. So I would guess (note the words guess) that it will perhaps run up to 5.5 maybe even 5.75 and then it will cycle down.
One other note, as was previously mentioned, and as you very well know, an inversion in the 10 year and overnight rate has predated a recession I believe 6 out of 7 times or something like that. The most recent inversion I believe is unwinding because the recession didn’t occur when many thought it would. Similarly inflation and stronger economic nunbers have “chased” the bond yield up. Anyways I am WAY out of my element in the past 2 paragraphs.
To be simple, noting where the 10 year is at, and where it may go in the near future may save potential buyers alot of money.
ParticipantHi Coop –
Unfortunately I don’t know of any good realtors in SFV. Just as a point of trivia I grew up in Porter Ranch…
Anyways I heartily agree that it is hard to find a trustworthy realtor. That doesn’t change my view that representation is not important for resale or for new homes. My advice is talk to friends who have bought/sold and were happy. Find out who they used.. Also never be afraid to ask the realtor for contact info from their most recent clients and then follow them up. Yeah I won’t be buying from the developers but only because I want a larger lot, and choke on MR fees. RE is tough because the literacy rate, and professionalism of the majority of the sales agents is sorry at best. So the majority of people out there deal with these idiots and abhor agents, and rightfully so.
I could not encourage you more to get the license on your own. If you never use it, it still is a good experience to go through. If you do use it, if only on a part time basis, then good for you. I am not to thrilled with the Redfin model. I have had a two people who complained to me that they got no support from the buyers agent but maybe that was due to the local office down here. Another alternative is to simply use a real estate attorney. That could save you some bucks as well.
Seriously though, take the class and become a licensee just to learn a little more about stuff. At the very least if you do use an agent you can keep him/her honest.
SD Realtor
ParticipantHi Coop –
Unfortunately I don’t know of any good realtors in SFV. Just as a point of trivia I grew up in Porter Ranch…
Anyways I heartily agree that it is hard to find a trustworthy realtor. That doesn’t change my view that representation is not important for resale or for new homes. My advice is talk to friends who have bought/sold and were happy. Find out who they used.. Also never be afraid to ask the realtor for contact info from their most recent clients and then follow them up. Yeah I won’t be buying from the developers but only because I want a larger lot, and choke on MR fees. RE is tough because the literacy rate, and professionalism of the majority of the sales agents is sorry at best. So the majority of people out there deal with these idiots and abhor agents, and rightfully so.
I could not encourage you more to get the license on your own. If you never use it, it still is a good experience to go through. If you do use it, if only on a part time basis, then good for you. I am not to thrilled with the Redfin model. I have had a two people who complained to me that they got no support from the buyers agent but maybe that was due to the local office down here. Another alternative is to simply use a real estate attorney. That could save you some bucks as well.
Seriously though, take the class and become a licensee just to learn a little more about stuff. At the very least if you do use an agent you can keep him/her honest.
SD Realtor
ParticipantHi Alex –
It took me all of a few minutes to find some pertinent posts for you. Please refer to thread title
“slow decline or is it a big chunk” in that thread I commented about my thoughts on the 10 year. This was June 4th.
also
“going rate in san diego for 30 year fixed, 7-1 arm, 5-1 arm” I posted extensively on my believes on the 10 year. I even commented on the rise of the 10 year of over 30 basis points from mid March. Then I went into an extensive explanation of my thoughts on the 10 year. This was done on May 21.
I can go through the history of posts and find many more Alex. Do you want me to do that?
Please respond to this as I don’t really appreciate your inference.
SD Realtor
ParticipantHi Alex –
It took me all of a few minutes to find some pertinent posts for you. Please refer to thread title
“slow decline or is it a big chunk” in that thread I commented about my thoughts on the 10 year. This was June 4th.
also
“going rate in san diego for 30 year fixed, 7-1 arm, 5-1 arm” I posted extensively on my believes on the 10 year. I even commented on the rise of the 10 year of over 30 basis points from mid March. Then I went into an extensive explanation of my thoughts on the 10 year. This was done on May 21.
I can go through the history of posts and find many more Alex. Do you want me to do that?
Please respond to this as I don’t really appreciate your inference.
SD Realtor
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