How low can we go? 30 yr fixed at 3.75% with no fees...
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I am afraid PANDA is right. I would rather have inflation, rather than deflation. It can be much worse between the two.
Because the path of least resistance is lower for rates. I said that the 10-year bond was going to hit 1% but I didn't think it'd happen this quickly. Now I'm thinking the 10-year might go to around 0.50%.
banks make their money at the inception of your loan with fees and then when it is sold to investors as mortgage-backed securities. the banks themselves don't actually carry the note once it is sold, but they can service it and make fees that way. the bank would be happy to refinance you into a lower rate because they can sell your loan again, earn a few more fees, and keep your business.
irvinebullhousing
Well-known member
Still a good ideas to move forward. If there is no waiting period required after refi. Cash preservation during this time is keys. No cost, and if you save a hundred or more is still saving.
sgip
Well-known member
as of 11:00 AM 10-Y at 0.96. Let's see how the day ends though.
Also - a good read:
http://www.mortgagenewsdaily.com/mortgage_rates/blog/937527.aspx
Will prices go up with low rates? Likely, because everyone who refinances is not going to sell. The 2009 refi boom has lead to inventory constriction from 2014 on (post Great Recession, when cyclical sales would have taken place). The 2020 refi boom may crush inventory again, causing whatever does go on sale to be hyper-valued.
We do live in interesting times.
My .02c
Also - a good read:
http://www.mortgagenewsdaily.com/mortgage_rates/blog/937527.aspx
Will prices go up with low rates? Likely, because everyone who refinances is not going to sell. The 2009 refi boom has lead to inventory constriction from 2014 on (post Great Recession, when cyclical sales would have taken place). The 2020 refi boom may crush inventory again, causing whatever does go on sale to be hyper-valued.
We do live in interesting times.
My .02c
panda
Well-known member
Cash is trash during an inflationary environment. This is not inflation my friend, what we are seeing is deflation unfolding right in front our eyes. When the FED cuts the rate by 1/2 a point, that is reckless in my opinion unless they are seeing a major deflation coming that you and I are not seeing right now.
zubs said:
irvinebullhousing
Well-known member
Panda said:
I am afraid PANDA is right. I would rather have inflation, rather than deflation. It can be much worse between the two.
usctrojancpa
Well-known member
OCtoSV said:
Because the path of least resistance is lower for rates. I said that the 10-year bond was going to hit 1% but I didn't think it'd happen this quickly. Now I'm thinking the 10-year might go to around 0.50%.
Since I'm not a financial expert, maybe someone can answer this.
So if the rates keep going down, and more people end up refinancing which would save the home owners, let's say, $300 a month, then are the banks losing that $300 a month per each customer? Whatever the amount is the banks end up losing anyways, right? So that piles up, the banks are in big trouble, no?
Again, I'm not an expert, so please forgive my ignorance and explain if you don't mind. Thanks!
So if the rates keep going down, and more people end up refinancing which would save the home owners, let's say, $300 a month, then are the banks losing that $300 a month per each customer? Whatever the amount is the banks end up losing anyways, right? So that piles up, the banks are in big trouble, no?
Again, I'm not an expert, so please forgive my ignorance and explain if you don't mind. Thanks!
Mety said:
banks make their money at the inception of your loan with fees and then when it is sold to investors as mortgage-backed securities. the banks themselves don't actually carry the note once it is sold, but they can service it and make fees that way. the bank would be happy to refinance you into a lower rate because they can sell your loan again, earn a few more fees, and keep your business.
In general, banks money on interest income. But they are diversified. (Commercial loans, investment, cds, mortgage, credit cards, etc....)
1. They make money with fees for refinance. For example if you walk into xyz bank they will charge you fees. But some do not charge fees to refi.
2. They might sell your loan and they make money there.
3. They might sell you other related products such as insurance and other products.
To answer your question: Yes, banks would make money if the interest rate was higher per say.
1. They make money with fees for refinance. For example if you walk into xyz bank they will charge you fees. But some do not charge fees to refi.
2. They might sell your loan and they make money there.
3. They might sell you other related products such as insurance and other products.
To answer your question: Yes, banks would make money if the interest rate was higher per say.
Mety said:
