How high will mortgage rates climb in the next 36 months?

[The Motor Court Company]

So that means you might as well borrow a little more to get non conforming non agency Jumbo to get the 5 handle rate because the monthly payment difference is quite large between 5 and 7 handles.

Be careful of BankRate and other rate aggregation websites as their data is often confusing and unclear. When inputting a "Jumbo" loan, it may be a lenders "Jumbo Conforming" - 7 handle pricing - and not a "Non-Conforming/Non-Agency Jumbo" - 5 handle pricing. There are the outliers in the low 5's, upper 4's - a product of not updating their pricing for BankRate. As Abraham Lincoln was fond of saying "Don't believe everything you see or hear on the Internet.".

Conforming loan terms are rising as the Fed deleverages their Agency MBS portfolios, and they have a pretty big boat to unload. That's why it's difficult to say when an opportunity to refinance may present itself. It's not the Fed Funds Rate or the 10yr T yield, but that plenty of MBS's exist for sale, but few buyers willing to take the deals available now.

Yes, there are plenty of buyers I've spoken with who have pushed back from the table saying "eh, I'll wait to see what prices do".

SGIP

 

[momopi]

You can refinance to lower rate a few years down the road, but you can't change purchase price, so it makes more sense to wait for lower prices, even at higher rates.

It gets worse if you purchase high and, in a RE down cycle, you're upside down and want to refi.

 

[CalBears96]

You can refinance to lower rate a few years down the road, but you can't change purchase price, so it makes more sense to wait for lower prices, even at higher rates.

It gets worse if you purchase high and, in a RE down cycle, you're upside down and want to refi.

Right, in which case you can't even refinance if you wanted to. I was pretty much in that boat with my Lake Elsinore purchase. Fortunately, I got a 7 year ARM and by the time my loan started floating in 2013, LIBOR was so low that I didn't have to refinance. My loan had been floating between 2.75% and 3.5% since.

 

[OCtoSV]

You can refinance to lower rate a few years down the road, but you can't change purchase price, so it makes more sense to wait for lower prices, even at higher rates.

It gets worse if you purchase high and, in a RE down cycle, you're upside down and want to refi.

Right, in which case you can't even refinance if you wanted to. I was pretty much in that boat with my Lake Elsinore purchase. Fortunately, I got a 7 year ARM and by the time my loan started floating in 2013, LIBOR was so low that I didn't have to refinance. My loan had been floating between 2.75% and 3.5% since.

I successfully rode the ARM train in the mid 2000s for our first house and then sold it in a relo in year 4 of the 5 yr ARM. My buddy who was writing MBS derivative contracts on a Wall St trading floor bought at the same time and went fixed rate - goes to show even insiders didn't fully know how toxic those products would become.

 

[usctrojancpa]

You can refinance to lower rate a few years down the road, but you can't change purchase price, so it makes more sense to wait for lower prices, even at higher rates.

It gets worse if you purchase high and, in a RE down cycle, you're upside down and want to refi.

Right, in which case you can't even refinance if you wanted to. I was pretty much in that boat with my Lake Elsinore purchase. Fortunately, I got a 7 year ARM and by the time my loan started floating in 2013, LIBOR was so low that I didn't have to refinance. My loan had been floating between 2.75% and 3.5% since.

I successfully rode the ARM train in the mid 2000s for our first house and then sold it in a relo in year 4 of the 5 yr ARM. My buddy who was writing MBS derivative contracts on a Wall St trading floor bought at the same time and went fixed rate - goes to show even insiders didn't fully know how toxic those products would become.

Regular ARM rates are not toxic loans, it's the evil twin the Option ARM that is the toxic loan.  ARM loans have been around for a long, long time and places like Canada only do ARM loans.  That being said, ARM loans are not for everyone and are a good fit for others.

 

[OCtoSV]

You can refinance to lower rate a few years down the road, but you can't change purchase price, so it makes more sense to wait for lower prices, even at higher rates.

It gets worse if you purchase high and, in a RE down cycle, you're upside down and want to refi.

Right, in which case you can't even refinance if you wanted to. I was pretty much in that boat with my Lake Elsinore purchase. Fortunately, I got a 7 year ARM and by the time my loan started floating in 2013, LIBOR was so low that I didn't have to refinance. My loan had been floating between 2.75% and 3.5% since.

I successfully rode the ARM train in the mid 2000s for our first house and then sold it in a relo in year 4 of the 5 yr ARM. My buddy who was writing MBS derivative contracts on a Wall St trading floor bought at the same time and went fixed rate - goes to show even insiders didn't fully know how toxic those products would become.

Regular ARM rates are not toxic loans, it's the evil twin the Option ARM that is the toxic loan.  ARM loans have been around for a long, long time and places like Canada only do ARM loans.  That being said, ARM loans are not for everyone and are a good fit for others.

well a lot of those era Alt A ARMs were toxic once the 3% down crowd was upside down though I  did a 10% down 5/1 that worked well for me. My point here was the people creating the actual toxic products themselves had no idea the end result would be a massive bailout of the institutions they worked for (except Lehman) resulting in QE to the moon that rendered any concern over interest rate risk that triggered taking the fixed rate when deciding on the loan in 2003 obsolete.

 

[Liar Loan]

I really hope for 20% correction within a year.

...you can't change purchase price, so it makes more sense to wait for lower prices...

 

[usctrojancpa]

You can refinance to lower rate a few years down the road, but you can't change purchase price, so it makes more sense to wait for lower prices, even at higher rates.

It gets worse if you purchase high and, in a RE down cycle, you're upside down and want to refi.

Right, in which case you can't even refinance if you wanted to. I was pretty much in that boat with my Lake Elsinore purchase. Fortunately, I got a 7 year ARM and by the time my loan started floating in 2013, LIBOR was so low that I didn't have to refinance. My loan had been floating between 2.75% and 3.5% since.

I successfully rode the ARM train in the mid 2000s for our first house and then sold it in a relo in year 4 of the 5 yr ARM. My buddy who was writing MBS derivative contracts on a Wall St trading floor bought at the same time and went fixed rate - goes to show even insiders didn't fully know how toxic those products would become.

Regular ARM rates are not toxic loans, it's the evil twin the Option ARM that is the toxic loan.  ARM loans have been around for a long, long time and places like Canada only do ARM loans.  That being said, ARM loans are not for everyone and are a good fit for others.

well a lot of those era Alt A ARMs were toxic once the 3% down crowd was upside down though I  did a 10% down 5/1 that worked well for me. My point here was the people creating the actual toxic products themselves had no idea the end result would be a massive bailout of the institutions they worked for (except Lehman) resulting in QE to the moon that rendered any concern over interest rate risk that triggered taking the fixed rate when deciding on the loan in 2003 obsolete.

You do realize that most of the buyers over the past 1-2 years were very strong (especially in Orange County) given that sellers had tons of offers so they selected the strongest buyer with the highest price.  Believe me, they weren't choosing someone who was on the edge because they didn't want to deal with an issue if the property didn't appraise.  On average, the buyers who bought in the past 2 years were way stronger than buyers back in the 2005-2008 time period. 

 

[CalBears96]

I really hope for 20% correction within a year.

...you can't change purchase price, so it makes more sense to wait for lower prices...

I see that you're still being ignorantly dumb. You really have no idea what's going on, so let me fill you in.

I bought my Bluffs 2 in December 2021, at $1.48M. My loan is 30 year fixed at 2.875%. Right now, IP is selling it at $1.8M+. Get it, dumbass?

If housing price drops 20%, then it would come back down to $1.44M, but we all know that IP would NEVER drop their price by 20%. Even if it did, the interest rate would be AT LEAST 8%.

So, would I be in better shape to wait until then, moron?

Really, you should stop posting anything related to real estate because you keep embarrassing yourself with your ignorance.

 

[someguy]

I really hope for 20% correction within a year.

...you can't change purchase price, so it makes more sense to wait for lower prices...

I see that you're still being ignorantly dumb. You really have no idea what's going on, so let me fill you in.

I bought my Bluffs 2 in December 2021, at $1.48M. My loan is 30 year fixed at 2.875%. Right now, IP is selling it at $1.8M+. Get it, dumbass?

If housing price drops 20%, then it would come back down to $1.44M, but we all know that IP would NEVER drop their price by 20%. Even if it did, the interest rate would be AT LEAST 8%.

So, would I be in better shape to wait until then, moron?

Really, you should stop posting anything related to real estate because you keep embarrassing yourself with your ignorance.

There's no need for name calling.  No need for talking down to people like that.  Let's keep TalkIrvine a civil community and resist the urge to dehumanize our fellow humans.

 

[irvinebullhousing]

8% rate handle is a good possibility for year end.

And it will remain stubbornly high level, don't expect a fast pivot from FED.

 

[CalBears96]

I really hope for 20% correction within a year.

...you can't change purchase price, so it makes more sense to wait for lower prices...

I see that you're still being ignorantly dumb. You really have no idea what's going on, so let me fill you in.

I bought my Bluffs 2 in December 2021, at $1.48M. My loan is 30 year fixed at 2.875%. Right now, IP is selling it at $1.8M+. Get it, dumbass?

If housing price drops 20%, then it would come back down to $1.44M, but we all know that IP would NEVER drop their price by 20%. Even if it did, the interest rate would be AT LEAST 8%.

So, would I be in better shape to wait until then, moron?

Really, you should stop posting anything related to real estate because you keep embarrassing yourself with your ignorance.

There's no need for name calling.  No need for talking down to people like that.  Let's keep TalkIrvine a civil community and resist the urge to dehumanize our fellow humans.

I asked him to stop embarrassing himself, but he keeps posting stupid shit, so what can I do?

 

[Ready2Downsize]

You are happy with your purchase? CheckMate. Have a great weekend and enjoy your home.

 

[Hugo Township]

I asked him to stop embarrassing himself, but he keeps posting stupid shit, so what can I do?

Just ignore it and move on. The slapfight personal attacks are zzz. Go Bears! 3-1!

 

[someguy]

I really hope for 20% correction within a year.

...you can't change purchase price, so it makes more sense to wait for lower prices...

I see that you're still being ignorantly dumb. You really have no idea what's going on, so let me fill you in.

I bought my Bluffs 2 in December 2021, at $1.48M. My loan is 30 year fixed at 2.875%. Right now, IP is selling it at $1.8M+. Get it, dumbass?

If housing price drops 20%, then it would come back down to $1.44M, but we all know that IP would NEVER drop their price by 20%. Even if it did, the interest rate would be AT LEAST 8%.

So, would I be in better shape to wait until then, moron?

Really, you should stop posting anything related to real estate because you keep embarrassing yourself with your ignorance.

There's no need for name calling.  No need for talking down to people like that.  Let's keep TalkIrvine a civil community and resist the urge to dehumanize our fellow humans.

I asked him to stop embarrassing himself, but he keeps posting stupid shit, so what can I do?

You can do literally anything other than reply.  You could do something nice for your wife.  You could walk around your neighborhood and admire the views and fresh air.  You could get busy with work.  Sharpen up your skills in your favorite hobby.  Exercise.  Anything.  There's nothing to be gained by sending negativity back and forth with an internet stranger. 

 

[CalBears96]

You can do literally anything other than reply.  You could do something nice for your wife.  You could walk around your neighborhood and admire the views and fresh air.  You could get busy with work.  Sharpen up your skills in your favorite hobby.  Exercise.  Anything.  There's nothing to be gained by sending negativity back and forth with an internet stranger.

I mean, I was here on the forum at that time, so I can't do any of that stuff you mentioned. Since the post was directed toward me, I felt compelled to reply.

And what I meant was "What do you do when someone say stupid shit to your face?" I don't mean literally to my face, but the post was directed toward me, so...

 

[sleepy5136]

You can do literally anything other than reply.  You could do something nice for your wife.  You could walk around your neighborhood and admire the views and fresh air.  You could get busy with work.  Sharpen up your skills in your favorite hobby.  Exercise.  Anything.  There's nothing to be gained by sending negativity back and forth with an internet stranger.

I mean, I was here on the forum at that time, so I can't do any of that stuff you mentioned. Since the post was directed toward me, I felt compelled to reply.

And what I meant was "What do you do when someone say stupid shit to your face?" I don't mean literally to my face, but the post was directed toward me, so...

If you make your point and one doesn't understand it, drop it. You're not running for president and need peoples vote. You've talked about retiring in your home, enjoy it. Don't let someone on the internet stress you out.

 

[CalBears96]

You can do literally anything other than reply.  You could do something nice for your wife.  You could walk around your neighborhood and admire the views and fresh air.  You could get busy with work.  Sharpen up your skills in your favorite hobby.  Exercise.  Anything.  There's nothing to be gained by sending negativity back and forth with an internet stranger.

I mean, I was here on the forum at that time, so I can't do any of that stuff you mentioned. Since the post was directed toward me, I felt compelled to reply.

And what I meant was "What do you do when someone say stupid shit to your face?" I don't mean literally to my face, but the post was directed toward me, so...

If you make your point and one doesn't understand it, drop it. You're not running for president and need peoples vote. You've talked about retiring in your home, enjoy it. Don't let someone on the internet stress you out.

This wasn't about us debating a point. This was about a moron saying stupid shit to me. I wasn't even talking to him when I made those comments. As long as he insists on being a willful ignorant moron, I'm going to call him out on it.

I'm normally respectful toward people, but there are 4 posters on TI that I have zero respect for: LL, moretroll, akula and StarmanMBA. Their MO is pushing disinformation and misinformation, and then would double down on the lies rather than admitting they were wrong.

 

[someguy]

You can do literally anything other than reply.  You could do something nice for your wife.  You could walk around your neighborhood and admire the views and fresh air.  You could get busy with work.  Sharpen up your skills in your favorite hobby.  Exercise.  Anything.  There's nothing to be gained by sending negativity back and forth with an internet stranger.

I mean, I was here on the forum at that time, so I can't do any of that stuff you mentioned. Since the post was directed toward me, I felt compelled to reply.

And what I meant was "What do you do when someone say stupid shit to your face?" I don't mean literally to my face, but the post was directed toward me, so...

If you make your point and one doesn't understand it, drop it. You're not running for president and need peoples vote. You've talked about retiring in your home, enjoy it. Don't let someone on the internet stress you out.

This wasn't about us debating a point. This was about a moron saying stupid shit to me. I wasn't even talking to him when I made those comments. As long as he insists on being a willful ignorant moron, I'm going to call him out on it.

I'm normally respectful toward people, but there are 4 posters on TI that I have zero respect for: LL, moretroll, akula and StarmanMBA. Their MO is pushing disinformation and misinformation, and then would double down on the lies rather than admitting they were wrong.

We're all adults here who know the difference between fact and fiction.  If you insist on an adversarial exchange, message the person privately.  No one wants to read countless posts with full of insults.  It's distracting and drags the conversation away from the topic.  People browse this message board to have a fun time exchanging thoughts about common local interests.  Join in the fun times and leave out the negativity.

 

[irvinebullhousing]

You can do literally anything other than reply.  You could do something nice for your wife.  You could walk around your neighborhood and admire the views and fresh air.  You could get busy with work.  Sharpen up your skills in your favorite hobby.  Exercise.  Anything.  There's nothing to be gained by sending negativity back and forth with an internet stranger.

I mean, I was here on the forum at that time, so I can't do any of that stuff you mentioned. Since the post was directed toward me, I felt compelled to reply.

And what I meant was "What do you do when someone say stupid shit to your face?" I don't mean literally to my face, but the post was directed toward me, so...

If you make your point and one doesn't understand it, drop it. You're not running for president and need peoples vote. You've talked about retiring in your home, enjoy it. Don't let someone on the internet stress you out.

This wasn't about us debating a point. This was about a moron saying stupid shit to me. I wasn't even talking to him when I made those comments. As long as he insists on being a willful ignorant moron, I'm going to call him out on it.

I'm normally respectful toward people, but there are 4 posters on TI that I have zero respect for: LL, moretroll, akula and StarmanMBA. Their MO is pushing disinformation and misinformation, and then would double down on the lies rather than admitting they were wrong.

We're all adults here who know the difference between fact and fiction.  If you insist on an adversarial exchange, message the person privately.  No one wants to read countless posts with full of insults.  It's distracting and drags the conversation away from the topic.  People browse this message board to have a fun time exchanging thoughts about common local interests.  Join in the fun times and leave out the negativity.

Don?t take it too seriously . Getting internet dunk is like watching a free comedy club without admission ticket.