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

[ps99472]

My first place was a 30 year mortgage.  Paid points too.  My first refi was into another 30 year, this was what, maybe 2 years after the 1st mortgage.  I believe I paid fees.  I'm in the dummy club as well.  The 5/1 ARM was never offered, the only person I can think of that tried to steer me away from the 30 was my uncle.  Should've taken his advice.  But he lost his house in the downturn so we ignored him.  People keep saying the interest is deductible, but why would you spend $4 to save $1?

 

[Irvinecommuter]

My first place was a 30 year mortgage.  Paid points too.  My first refi was into another 30 year, this was what, maybe 2 years after the 1st mortgage.  I believe I paid fees.  I'm in the dummy club as well.  The 5/1 ARM was never offered, the only person I can think of that tried to steer me away from the 30 was my uncle.  Should've taken his advice.  But he lost his house in the downturn so we ignored him.  People keep saying the interest is deductible, but why would you spend $4 to save $1?

I can't speak to your particular situation but I am pretty certain that rates are going up in the next few years so there is no reason to believe that you can refinance in a few years at better rates.  Also, with the prices as high as they are, it makes the move-up strategy more and more difficult.  So, a lot of people are just buying the most house they can and staying there for awhile.

ARM products can be good for certain situations but I would say that it's not for most people.

As for the tax deduction...I don't think anyone gets a 30 year fixed because of the tax deductions.  It's just an ancillary consideration.

 

[sgip]

Bottom line: There is a real price for peace of mind. Some people will sleep very well at night with a 4.x rate 30 fixed. Could they do better financially with another product? It's possible. Will that borrower be comfortable chasing lowest rate/cost/plan/adjustment terms/caps/margins/payments? Not always.

In the past when a borrower said "I only want a 30 fixed" lenders could work.under those restrictions. Today we are compelled to present all options (a good thing IMHO) and in many cases a fully informed borrower will end up with a 30 fixed rate. Is that their best choice? Yes. It fits their unique and personal needs, which is all that matters.

 

[irvinehomeowner]

My first place was a 30 year mortgage.  Paid points too.  My first refi was into another 30 year, this was what, maybe 2 years after the 1st mortgage.  I believe I paid fees.  I'm in the dummy club as well.  The 5/1 ARM was never offered, the only person I can think of that tried to steer me away from the 30 was my uncle.  Should've taken his advice.  But he lost his house in the downturn so we ignored him.  People keep saying the interest is deductible, but why would you spend $4 to save $1?

So the question is... why did you go 30 year to being with? There's your 10th man.

@qwerty: Not sweating $17k over 5 years is 1%er speak. For me that's an extra $17k in my 401k which will translate to much more when I'm playing shuffleboard in Laguna Woods.

 

[Irvinecommuter]

My first place was a 30 year mortgage.  Paid points too.  My first refi was into another 30 year, this was what, maybe 2 years after the 1st mortgage.  I believe I paid fees.  I'm in the dummy club as well.  The 5/1 ARM was never offered, the only person I can think of that tried to steer me away from the 30 was my uncle.  Should've taken his advice.  But he lost his house in the downturn so we ignored him.  People keep saying the interest is deductible, but why would you spend $4 to save $1?

So the question is... why did you go 30 year to being with? There's your 10th man.

@qwerty: Not sweating $17k over 5 years is 1%er speak. For me that's an extra $17k in my 401k which will translate to much more when I'm playing shuffleboard in Laguna Woods.

I don't think he is saying that $17K is not a good amount of money.  My view of it is that you can get $17K in benefits going with an ARM but if the loan adjusts badly for you, it may cost you a lot more than $17K over the remainder of the loan. 

 

[irvinehomeowner]

I don't think he is saying that $17K is not a good amount of money.  My view of it is that you can $17K but if the loan adjusts badly for you, it may cost you a lot more than $17K over the remainder of the loan. 

No... trust me... a guy who doesn't care if an HOA quadruples his penalties or wants to renovate his new home just after 2 years thinks $17k is pocket change.

CPAs only care about managing funds at work... not at home.

 

[qwerty]

My first place was a 30 year mortgage.  Paid points too.  My first refi was into another 30 year, this was what, maybe 2 years after the 1st mortgage.  I believe I paid fees.  I'm in the dummy club as well.  The 5/1 ARM was never offered, the only person I can think of that tried to steer me away from the 30 was my uncle.  Should've taken his advice.  But he lost his house in the downturn so we ignored him.  People keep saying the interest is deductible, but why would you spend $4 to save $1?

So the question is... why did you go 30 year to being with? There's your 10th man.

@qwerty: Not sweating $17k over 5 years is 1%er speak. For me that's an extra $17k in my 401k which will translate to much more when I'm playing shuffleboard in Laguna Woods.

I don't think he is saying that $17K is not a good amount of money.  My view of it is that you can get $17K in benefits going with an ARM but if the loan adjusts badly for you, it may cost you a lot more than $17K over the remainder of the loan. 

Correct. Id like an extra 17k over 5 years, that's a couple of nice vacations, but it's money I'm willing to forego for the peace of mind. Likely not the best financial move but in 8.5 years we will have a, hopefully, have a paid off $1M+ home so that 17-30k hurts a little less. Then I can switch jobs and take a 99%er job

 

[paperboyNC]

I can't speak to your particular situation but I am pretty certain that rates are going up in the next few years so there is no reason to believe that you can refinance in a few years at better rates.  Also, with the prices as high as they are, it makes the move-up strategy more and more difficult.  So, a lot of people are just buying the most house they can and staying there for awhile.

ARM products can be good for certain situations but I would say that it's not for most people.

As for the tax deduction...I don't think anyone gets a 30 year fixed because of the tax deductions.  It's just an ancillary consideration.

The move-up market is mostly caused by family situations. I have several friends in the OC area that moved up to larger homes in the last year - all did it because of an expanding family. You might be surprised how many people live in apartments, rentals or small homes that can afford buying a huge home with 20%+ down payment.

I know that as soon as my wife got pregnant she insisted we move out of our 2 bedroom apartment and into a house. I pointed out that all of our neighbors had kids so obviously it was possible to raise 1 baby in a 2 bedroom apartment and she pointed out that our neighbors probably couldn't afford a nice house like we could or they'd move too. She won and we moved and stopped saving as much.

 

[irvinerealtor]

"The hand that rocks the cradle is the hand that rules the world." - Wm Wallace

 

[Irvinecommuter]

I can't speak to your particular situation but I am pretty certain that rates are going up in the next few years so there is no reason to believe that you can refinance in a few years at better rates.  Also, with the prices as high as they are, it makes the move-up strategy more and more difficult.  So, a lot of people are just buying the most house they can and staying there for awhile.

ARM products can be good for certain situations but I would say that it's not for most people.

As for the tax deduction...I don't think anyone gets a 30 year fixed because of the tax deductions.  It's just an ancillary consideration.

The move-up market is mostly caused by family situations. I have several friends in the OC area that moved up to larger homes in the last year - all did it because of an expanding family. You might be surprised how many people live in apartments, rentals or small homes that can afford buying a huge home with 20%+ down payment.

I know that as soon as my wife got pregnant she insisted we move out of our 2 bedroom apartment and into a house. I pointed out that all of our neighbors had kids so obviously it was possible to raise 1 baby in a 2 bedroom apartment and she pointed out that our neighbors probably couldn't afford a nice house like we could or they'd move too. She won and we moved and stopped saving as much.

Agreed.  That's why we moved.  But because of the bubble, the difficulty in getting loans, and jump in prices in the past year or so, most buyers these days cannot do the traditional move-up from a 2 bedroom condo to a 3 bedroom house, and then to a 4 bedroom house.  Most buyers are jumping from renting to the 4 bedroom because they were either priced out during the bubble or were waiting/saving for the right moment.   

I think the move-up model was still viable about 2 years ago when prices were stagnant/low and rates were insanely low.  But now, prices are high and the rates are not as low, people are just biting the bullet to buy the biggest house they can.

 

[paperboyNC]

Agreed.  That's why we moved.  But because of the bubble, the difficulty in getting loans, and jump in prices in the past year or so, most buyers these days cannot do the traditional move-up from a 2 bedroom condo to a 3 bedroom house, and then to a 4 bedroom house.  Most buyers are jumping from renting to the 4 bedroom because they were either priced out during the bubble or were waiting/saving for the right moment.   

I think the move-up model was still viable about 2 years ago when prices were stagnant/low and rates were insanely low.  But now, prices are high and the rates are not as low, people are just biting the bullet to buy the biggest house they can.

I have a friend that is buying at Orchard Hills and even though both the husband and wife work they are buying a house they qualify for with only one income (I did the same) with plans to move up in 4-5 years. I'm sure some people are doing what you say, but I highly doubt they are the majority of Irvine buyers. If Irvine buyers were stretched you'd see a lot more FHA loans IMO.

 

[OpenSky]

 

[irvinehomeowner]

ps9 is going to refi for more than 30 years.

2044:

Bank: Uh... your loan balance is only $73, why do you want to refi?
ps9: Because it will save me $20 over the refi I just did 2 months ago.

 

[Irvinecommuter]

Agreed.  That's why we moved.  But because of the bubble, the difficulty in getting loans, and jump in prices in the past year or so, most buyers these days cannot do the traditional move-up from a 2 bedroom condo to a 3 bedroom house, and then to a 4 bedroom house.  Most buyers are jumping from renting to the 4 bedroom because they were either priced out during the bubble or were waiting/saving for the right moment.   

I think the move-up model was still viable about 2 years ago when prices were stagnant/low and rates were insanely low.  But now, prices are high and the rates are not as low, people are just biting the bullet to buy the biggest house they can.

I have a friend that is buying at Orchard Hills and even though both the husband and wife work they are buying a house they qualify for with only one income (I did the same) with plans to move up in 4-5 years. I'm sure some people are doing what you say, but I highly doubt they are the majority of Irvine buyers. If Irvine buyers were stretched you'd see a lot more FHA loans IMO.

The fact that your friend can qualify for a house in Irvine with just one income makes him (and you) very rare.  FHA has significant limits and forced mortgage insurance that makes payments higher.

 

[bones]

[asdfasdf

 

[Irvinecommuter]

Agreed.  That's why we moved.  But because of the bubble, the difficulty in getting loans, and jump in prices in the past year or so, most buyers these days cannot do the traditional move-up from a 2 bedroom condo to a 3 bedroom house, and then to a 4 bedroom house.  Most buyers are jumping from renting to the 4 bedroom because they were either priced out during the bubble or were waiting/saving for the right moment.   

I think the move-up model was still viable about 2 years ago when prices were stagnant/low and rates were insanely low.  But now, prices are high and the rates are not as low, people are just biting the bullet to buy the biggest house they can.

I have a friend that is buying at Orchard Hills and even though both the husband and wife work they are buying a house they qualify for with only one income (I did the same) with plans to move up in 4-5 years. I'm sure some people are doing what you say, but I highly doubt they are the majority of Irvine buyers. If Irvine buyers were stretched you'd see a lot more FHA loans IMO.

The fact that your friend can qualify for a house in Irvine with just one income makes him (and you) very rare.  FHA has significant limits and forced mortgage insurance that makes payments higher.

Is it though?  There are a ton of stay at home moms in irvine living in brand new construction or expensive resale.

I would say that the major of those are FCB who don't employ the  mortgage industry anyways. 

 

[bones]

[qasdf

 

[OpenSky]

:

 

[bones]

[quoteasdf

 

[paperboyNC]

Is it though?  There are a ton of stay at home moms in irvine living in brand new construction or expensive resale.

I would say that the major of those are FCB who don't employ the  mortgage industry anyways.

My wife worked when we bought our house but is a stay at home now and is friends with a lot of other stay at home moms. None of them are married to FCBs. Take that for what it's worth.