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May 22, 2007 at 10:00 AM in reply to: Going rate in San Diego for 30 yr fixed, 5-1 ARM, 7-1 ARM #54295
SD Realtor
ParticipantHammer the Libor is one of the indices that the hybrids convert to after the fixed period. My advice to people is to track the 10 year, then add around 1.1-1.25 (+/- 10-15 basis points) to get an approximate rate for a standard 30 year fully amortized mortgage with maybe 1 point for origination. This is just an approximation. The hybrid fixed components will vary around that value. The problem is that when you try to figure out the rates of the 5/1, 7/1 etc after the reset you are trying to peer into the future to see what the Libor will do. Most people that (or should I say most SANE people) only use these types of loans because they know they will be selling (or they have been duped by some broker or Realtor to think they can refinance) prior to the conversion. The bottom line is that they will not be paying the monthly payment based on the Libor, it will be based on the fixed component of the mortgage which was ultimately generated based on the 10 or 30 year.
I think the best thing people can do is to not worry about what rates are doing today but what direction are they trending. Clearly looking at the 10 year the trend line appears to be up. Thus even the fixed components of the 5/1, 7/1 etc will be moving up as long as the 10 yr keeps going that way.
The other thing to realize is that rate sheets are created pretty much daily. As most of you know, maybe some don’t, are that lenders generate new rate sheets every day based on the movement of the bond market. When the bond market sells off, (rates go up) and thus the lenders boost rates immediately. Now when the bond market rallies and rates go down, lenders do not generally move immediately. They will wait to see if the market stays at the new level for a few days and if that happens, then they lower the rate. (yes they screw people by hiking quickly and lowering very slowly)…
Also I have confined my analysis to the 10 year treasury but the 30 year is also pertinent. They pretty move (or trend shall I say) in lock step.
ps – I am not a mortgage broker and all the above diatribe was my own speculation!
SD Realtor
May 22, 2007 at 10:00 AM in reply to: Going rate in San Diego for 30 yr fixed, 5-1 ARM, 7-1 ARM #54308ParticipantHammer the Libor is one of the indices that the hybrids convert to after the fixed period. My advice to people is to track the 10 year, then add around 1.1-1.25 (+/- 10-15 basis points) to get an approximate rate for a standard 30 year fully amortized mortgage with maybe 1 point for origination. This is just an approximation. The hybrid fixed components will vary around that value. The problem is that when you try to figure out the rates of the 5/1, 7/1 etc after the reset you are trying to peer into the future to see what the Libor will do. Most people that (or should I say most SANE people) only use these types of loans because they know they will be selling (or they have been duped by some broker or Realtor to think they can refinance) prior to the conversion. The bottom line is that they will not be paying the monthly payment based on the Libor, it will be based on the fixed component of the mortgage which was ultimately generated based on the 10 or 30 year.
I think the best thing people can do is to not worry about what rates are doing today but what direction are they trending. Clearly looking at the 10 year the trend line appears to be up. Thus even the fixed components of the 5/1, 7/1 etc will be moving up as long as the 10 yr keeps going that way.
The other thing to realize is that rate sheets are created pretty much daily. As most of you know, maybe some don’t, are that lenders generate new rate sheets every day based on the movement of the bond market. When the bond market sells off, (rates go up) and thus the lenders boost rates immediately. Now when the bond market rallies and rates go down, lenders do not generally move immediately. They will wait to see if the market stays at the new level for a few days and if that happens, then they lower the rate. (yes they screw people by hiking quickly and lowering very slowly)…
Also I have confined my analysis to the 10 year treasury but the 30 year is also pertinent. They pretty move (or trend shall I say) in lock step.
ps – I am not a mortgage broker and all the above diatribe was my own speculation!
SD Realtor
ParticipantI would keep it as well. I have a couple of listings in Oceanside and it is a grinder market up there. I am skeptical about the 475k-500k estimate for the sale of a 3/2 even if it is quite fixed up. If you are even breaking even on the cash flow then you are doing okay. My advice would be to keep it, save as much cash as you can so that when you come back you can use what you save for a dp on another property.
Thank you for serving our country. Guys like you are heroes in my book.
If you want more stats, post what part of Oceanside you are in and I will post the active/pending ratio, and other information that I am not so sure your property manager gave you.
SD Realtor
ParticipantI would keep it as well. I have a couple of listings in Oceanside and it is a grinder market up there. I am skeptical about the 475k-500k estimate for the sale of a 3/2 even if it is quite fixed up. If you are even breaking even on the cash flow then you are doing okay. My advice would be to keep it, save as much cash as you can so that when you come back you can use what you save for a dp on another property.
Thank you for serving our country. Guys like you are heroes in my book.
If you want more stats, post what part of Oceanside you are in and I will post the active/pending ratio, and other information that I am not so sure your property manager gave you.
SD Realtor
May 21, 2007 at 11:24 PM in reply to: Going rate in San Diego for 30 yr fixed, 5-1 ARM, 7-1 ARM #54242ParticipantLook at the 10 year treasury. Mortgage rates will track that. The 10 year treasury is up about 30 basis points since mid March.
SD Realtor
May 21, 2007 at 11:24 PM in reply to: Going rate in San Diego for 30 yr fixed, 5-1 ARM, 7-1 ARM #54253ParticipantLook at the 10 year treasury. Mortgage rates will track that. The 10 year treasury is up about 30 basis points since mid March.
SD Realtor
ParticipantThis is kind os a puzzler….
I am looking at the MLS…. In the solds it comes up for the 10/18/06 sale at 525k like you said. However, there is NO sold MLS information for 4/2/07 closing! Maybe I am just missing something.
Indeed this is another one of those transactions I cannot explain. I will say that the mortgage recorded for the 4/2/07 transaction was for 520k. Also, on the tax roll I was looking at there was not any information regarding the sales price so I cannot confirm the sales price you quoted. I am not saying it didn’t happen just that it is not on the realist tax roll info I get on the MLS. Of course maybe it was there and I overlooked it.
SD Realtor
ParticipantThis is kind os a puzzler….
I am looking at the MLS…. In the solds it comes up for the 10/18/06 sale at 525k like you said. However, there is NO sold MLS information for 4/2/07 closing! Maybe I am just missing something.
Indeed this is another one of those transactions I cannot explain. I will say that the mortgage recorded for the 4/2/07 transaction was for 520k. Also, on the tax roll I was looking at there was not any information regarding the sales price so I cannot confirm the sales price you quoted. I am not saying it didn’t happen just that it is not on the realist tax roll info I get on the MLS. Of course maybe it was there and I overlooked it.
SD Realtor
May 21, 2007 at 2:45 PM in reply to: The current pendings include a lot of must-sell listings #54167ParticipantAgreed with you bugs. I have seen the old “corporate owned” used a few times. That is a definite bust.
Also I have seen listings that give no hint at all they are REO and I just happened to look at the tax roll to find out they are.
SD Realtor
May 21, 2007 at 2:45 PM in reply to: The current pendings include a lot of must-sell listings #54180ParticipantAgreed with you bugs. I have seen the old “corporate owned” used a few times. That is a definite bust.
Also I have seen listings that give no hint at all they are REO and I just happened to look at the tax roll to find out they are.
SD Realtor
May 21, 2007 at 2:42 PM in reply to: Question for sdr, jim, rustico, bugs or other realtors and appraisers #54165ParticipantHaving a good relationship with a reputable TO is SUPER helpful. Especially if you are looking for yourself. That way prior to the auction you will already have had your TO run a prelinary report AND send you all recordings on the property. Right now I have a client in Oceanside and she has been running my TO (through me) ragged getting prelims, and stacks of recorded docs on the foreclosures she is interested in.
SD Realtor
May 21, 2007 at 2:42 PM in reply to: Question for sdr, jim, rustico, bugs or other realtors and appraisers #54178ParticipantHaving a good relationship with a reputable TO is SUPER helpful. Especially if you are looking for yourself. That way prior to the auction you will already have had your TO run a prelinary report AND send you all recordings on the property. Right now I have a client in Oceanside and she has been running my TO (through me) ragged getting prelims, and stacks of recorded docs on the foreclosures she is interested in.
SD Realtor
May 21, 2007 at 12:43 PM in reply to: Question for sdr, jim, rustico, bugs or other realtors and appraisers #54133ParticipantHi Rus –
I do not rule out more then 10% drops annually. I to have seen many many cases where we have already exceeded that rate, bigtime… I just use that value as a possible outcome with the explanation that it could be better (not likely) and it could be worse. The probability for which depends (IMO) on the type of property and the location. I think every title officer is different. For the one I work with, he gave me a login to their system which covers all of SoCal. I type in zips, and date ranges to get NODs, NOTs and REO.
No generally I do not do property management. I think getting a qualified property manager is essential for certain types of landlords, (out of state, or hands off) but I manage my own rentals without a manager. For the most part I would refer people to a qualified property manager.
SD Realtor
May 21, 2007 at 12:43 PM in reply to: Question for sdr, jim, rustico, bugs or other realtors and appraisers #54146ParticipantHi Rus –
I do not rule out more then 10% drops annually. I to have seen many many cases where we have already exceeded that rate, bigtime… I just use that value as a possible outcome with the explanation that it could be better (not likely) and it could be worse. The probability for which depends (IMO) on the type of property and the location. I think every title officer is different. For the one I work with, he gave me a login to their system which covers all of SoCal. I type in zips, and date ranges to get NODs, NOTs and REO.
No generally I do not do property management. I think getting a qualified property manager is essential for certain types of landlords, (out of state, or hands off) but I manage my own rentals without a manager. For the most part I would refer people to a qualified property manager.
SD Realtor
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