How low can we go? 30 yr fixed at 3.75% with no fees...

NEW -> Contingent Buyer Assistance Program
ps9 said:
Wouldn't there be a seasoning clause to prevent people from taking too much credit and then refi again before the break even point?  If there isn't, sign me up too.
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You are limited to how much in credits you can take up to your allowable closing costs.  Let's say your allowable closing costs are $2k and your credit is $3k then you'll only be able to use $2k of the credit and the rest goes to waste because lender will not cut you a check at the close of the refi.  I think the loan has to be sold to Fannie/Freddie before you can refi but I'd defer to SGIP to be sure.
 
USCTrojanCPA said:
You are limited to how much in credits you can take up to your allowable closing costs.  Let's say your allowable closing costs are $2k and your credit is $3k then you'll only be able to use $2k of the credit and the rest goes to waste because lender will not cut you a check at the close of the refi.  I think the loan has to be sold to Fannie/Freddie before you can refi but I'd defer to SGIP to be sure.
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The alternative is to set up an impound account.  The excess credit can be used to fund this account.  Once the loan funds, you can cancel the impound account and receive a check for the balance.  That's what I just did...
 
ps9 said:
so if we assume your mortgaged amount is $625k and typical refi cost is ~$1500 (that's my own experience, anything more I would be looking elsewhere)

at 3.75% interest starts at $1953/month, $5000 credit -$1500 refi fees = $3500 leftover for ur impound per ur post

at 3.625% (per ur post) interest starts at $1888/month, $1875 credit - $1500 refi fees = $375 leftover

Difference in interest paid is $65/month.. at 1 year the interest difference is $780..so instead of depositing ur own INTEREST free money (~$3000) in ur impound, going with the banks credit after a year will cost you $780 more in interest.  So is it worth paying $780 per year for an extra $3000?
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Please provide a breakdown of that $1500 from your experience.  Title insurance alone will eat up most of that, though it is based on home value and not loan value.  Application, appraisal, certifications, notary, recording, etc...it all adds up.  And the closing costs are just an estimate.  I wanted to be SURE they were completely covered.  As I stated before, I will roll the refi dice and hold out hope I can do even better, even though the odds are slim.  If I knew for certain I would have the option, then chasing the biggest rebate makes the most sense, as long as it does not exceed total settlement costs.  Also, $66 is the difference in interest in the 1st month but not every month, and on a FRM the delta in payment is only $44...$528/year not $780.

woodburyowner said:
The alternative is to set up an impound account.  The excess credit can be used to fund this account.  Once the loan funds, you can cancel the impound account and receive a check for the balance.  That's what I just did...
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+1  Looking at the settlement sheet now, and that is exactly what they did.  The entire credit is an "adjusted origination charge" and is deducted from the  "charges for all other settlement".  Had I gone with the bigger rebate, I might have wasted some of it.
 
3.25% with rebates today from Intarweb Lenders only. Didn't think I'd ever see it but it's certainly here. Even stranger - 15 year fixed in the upper 2's. We finally hit USC's 1.49 10 year T yesterday. Can't wait to see a negative yield 2 year note like the Swiss have. Crazy times.


There isn't a limit in the amount of lender rebate you can be given. It must be spent on things other than principal reductions. You could theoretically refinance at 3.5% and get an impound account paid for, 90 days later kill off the impound account, then refinance again at 3.375%, get the impound account, and so on.

Lenders have both seasoning and benefit to borrower requirements to prevent this kind of "churning". No one wants to book a loan that's in the short run a loser for them only to see it refinanced off the books not long after x number of payments are made. Expect 90 days (3 payments) before you can get rid of an impound account, and most lenders want to see you have 4 to 6 months in your current loan before they will approve a new refinance. From there, the "benefit to borrower" piece comes into play. If you closed at 4.0% and refinance to 3.75% - there's a benefit. If you close at 3.75% and refinance again to 3.75% simply to get a new impound account, that's "churning" and no one's going to take the deal. Some lenders have a percentage of benefit, not just a .125% rate increment requirement in their guidelines.

During the boom, I knew of an accountant in Huntington Beach who refinanced with Countrywide ever 120 days. He had a 1.0% Option ARM that had a great teaser rate and a massive rebate to cover closing costs, while still making the loan officer a rich man for time and effort. Remember in context that this was during the days of a 5.0% 30 fixed and a 4.0% 5/1 ARM market. Eventually as we know today the music stopped and someone was left standing without a chair to sit on. The guy didn't get forclosed on, but for the time that revolving door was going round and round he did very well for himself.


My .02c
 
10-year bond has hit 1.39% and looks like you get get a confirming loan (<=$417k) at par for 3.25%.  I'm thinking if the 10-year does hit 1%, we could see 3% flat at par for the 30-year fixed conforming loan.
 
USCTrojanCPA said:
10-year bond has hit 1.39% and looks like you get get a confirming loan (<=$417k) at par for 3.25%.  I'm thinking if the 10-year does hit 1%, we could see 3% flat at par for the 30-year fixed conforming loan.
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0 Fees?  :-*
 
homer_simpson said:
USCTrojanCPA said:
10-year bond has hit 1.39% and looks like you get get a confirming loan (<=$417k) at par for 3.25%.  I'm thinking if the 10-year does hit 1%, we could see 3% flat at par for the 30-year fixed conforming loan.
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0 Fees?  :-*
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If your credit score is over 800 then amerisave will give you a small credit for 3.25%.
 
I saw the credit over $2,000, which can cover your cost of $1500,  you still have $500 left for interests.

USCTrojanCPA said:
homer_simpson said:
USCTrojanCPA said:
10-year bond has hit 1.39% and looks like you get get a confirming loan (<=$417k) at par for 3.25%.  I'm thinking if the 10-year does hit 1%, we could see 3% flat at par for the 30-year fixed conforming loan.
Click to expand...

0 Fees?  :-*
Click to expand...
If your credit score is over 800 then amerisave will give you a small credit for 3.25%.
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gld2 said:
I saw the credit over $2,000, which can cover your cost of $1500,  you still have $500 left for interests.

USCTrojanCPA said:
homer_simpson said:
USCTrojanCPA said:
10-year bond has hit 1.39% and looks like you get get a confirming loan (<=$417k) at par for 3.25%.  I'm thinking if the 10-year does hit 1%, we could see 3% flat at par for the 30-year fixed conforming loan.
Click to expand...

0 Fees?  :-*
Click to expand...
If your credit score is over 800 then amerisave will give you a small credit for 3.25%.
Click to expand...
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It was less than $1,000 when I looked in the morning, looks like it's increased as the market has tanked.
 
With AAPL missing it's possible we'll see stocks slump tomorrow, pushing more cash out of risk and into government paper. I've given up on telling how low things can go. Every day is a greater surprise with these numbers.

Some companies are experiencing pushbacks from the Agencies for paper they closed recently. One local radio ad heavy who also makes "Personal Loans" is going through a FNMA audit and it's not going well from what we've been told.
 
Just giving another data point.  I'm refi'ing a conventional 30 yr fixed for 3.5%, no fees, no impounds.  Locked a couple weeks ago.  I'm happy with the rate and can't see ever refi'ing again, but who knows. 
 
Mortgage rates really spiked up today (also last 2 weeks or so).  Best bet now is cashcall since they are still offering 3.75% for Super Conforming 30 with no points/fees.
 
Provident is trying to slow the business down as their pipelines are full.

Rates spiked up a bit last year, but in 60 days they were back in line with the market prior to the spike. It's a blip - a significant one - but not a trend.

My .02c
 
Soylent Green Is People said:
Provident is trying to slow the business down as their pipelines are full.

Rates spiked up a bit last year, but in 60 days they were back in line with the market prior to the spike. It's a blip - a significant one - but not a trend.

My .02c
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So when lenders get too full of any particular type of loan, they'll just jack up their rates to steer the business away?
 
All the time. Just as some banks will lower rates on specific products and try to increase market share, the opposite is also true. When a lender has it's fill of business, struggling to close what it has, they often will raise their rates causing inflow of new business to collapse. Give them another month. I'm sure they'll come back in the market soon.

My .02c
 
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