irvinehomeshopper
Well-known member
Isn't rate pretty low right now and why take the risk being greedy?
Mortgage Rate Lock?
- Thread starter RC383
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IR2 - the dig was meant at Indie, given how smart he is, or at least claims to be, you would think he would share his predictions, but instead he just claims it would be fortune telling. Ive come to know your conservative style over the years and can understand where your coming from, given the large purchases your clients are making you want them to be solely responsible for their decision. With that said, if people ask for your opinion there is nothing wrong with sharing what you think is going to happen. Whenever i give my opinion, i assume the person asking for the opinion will ultimately do what is best for themselves. After all, the advice i give is worth what was paid for it, nothing.
i agree that no one knows what is going to happen, but like you have said many times before, you can spot trends and make an educated guess. you said you do sophisticated modeling, all that is is coming up with educated inputs to come out with a probable outcome. that is all people here are asking. im sure no one is going to hold it against you if you are wrong. we are all wrong, im not any good at it or my trading account would be a hell of a lot bigger.
in my opinion that turmoil USC and SGIP do add clarity to the equation though. anytime s#it hits the fan around the world money seems to come pouring into treasuries which help keep the rates down. so given all the crap going on around the world it would seem to me that the most probable outcome is that rates would continue to stay low for the 3-6 months and not waste any money on a long-term rate lock.
I'm not saying your opinion is not well thought out. There are people who can come up with well thought out opinions as to why the next card in a game of black jack will be a face card.
You can't compare my opinions on the housing market to my outlook on interest rates. Housing prices generally move in one direction for many years based on numerous market factors. Even in a market of high volatility, like 2006-2007, the shift was subtle, and it took months of slight decline before it went into free fall.
With interest rates, as IR pointed out, even a .25 or .5 swing in a certain direction could have a heavy effect on someones financial situation, and we're talking about scoping over 6 months. 1-3 months, maybe. But 6 months? You better change your name to the Oracle, and start charging for that knowledge.
sgip
Well-known member
Wait. Unless they will give you a free float down (get it in writing first) a long term lock is throwing good money after bad.
3.625 has been a general bottom for 30 year fixed rates. 4.50 was a top ($417k and below). You've got less than 1 percentage point in rate variance over the past 2 years. The Feds have been saying 2014 before rates go up. Some Fed governors urging a rate CUT in January - no more than 45 days ago. Greece isn't settled. Let's say they do get things wrapped up in Athens this week. What's to stop Belfast or Barcelona from asking for the same haircut? This thing is far from over, over there.
Wait.
My .02c
3.625 has been a general bottom for 30 year fixed rates. 4.50 was a top ($417k and below). You've got less than 1 percentage point in rate variance over the past 2 years. The Feds have been saying 2014 before rates go up. Some Fed governors urging a rate CUT in January - no more than 45 days ago. Greece isn't settled. Let's say they do get things wrapped up in Athens this week. What's to stop Belfast or Barcelona from asking for the same haircut? This thing is far from over, over there.
Wait.
My .02c
usctrojancpa
Well-known member
Here's the problem with TM, she has already signed the contract (including the addendum for agreed upon credits). They will be loathe to give her any additional credits at this point (I know because I tried).rkp said:
usctrojancpa
Well-known member
Very well put, there's just too much unsettled crap out there for rates to jump in the near term. If I could predict interest rates, I'd be a bond trader sipping on a cold drink on some paradise island somewhere but you have a lot headwinds in the way of going up a lot anytime soon. I would also recommend waiting to lock.Soylent Green Is People said:
usctrojancpa
Well-known member
Can't help it man, I guess I'm one of those overly opinioned Europeans. haha Nothing wrong with sharing guestimates based upon our personal forecasts, especially if someone asks for it and knows to consider other things.qwerty said:
irvinerealtor
Well-known member
I don't mind the criticism for being conservative, considering that it's other people's money.
Some numbers to back up why I find it dangerous (for me) to speculate:
Using SGIP's top and bottom differential rates, 3.625% and 4.5% respectively, the interest payment for month 1 on a $725K loan ranges from $2190 to $2718.75.
While it is a small (<1%) change in interest rate, it results in a possible swing of 19.4% on a monthly interest payment.
-IR2
Some numbers to back up why I find it dangerous (for me) to speculate:
Using SGIP's top and bottom differential rates, 3.625% and 4.5% respectively, the interest payment for month 1 on a $725K loan ranges from $2190 to $2718.75.
While it is a small (<1%) change in interest rate, it results in a possible swing of 19.4% on a monthly interest payment.
-IR2
qwerty
Well-known member
IrvineRealtor said:
IR2 - the dig was meant at Indie, given how smart he is, or at least claims to be, you would think he would share his predictions, but instead he just claims it would be fortune telling. Ive come to know your conservative style over the years and can understand where your coming from, given the large purchases your clients are making you want them to be solely responsible for their decision. With that said, if people ask for your opinion there is nothing wrong with sharing what you think is going to happen. Whenever i give my opinion, i assume the person asking for the opinion will ultimately do what is best for themselves. After all, the advice i give is worth what was paid for it, nothing.
IndieDev
New member
Qwerty, dig at me all you want.
Being smart, doesn't mean fortune telling. Paid opinion or not, no one knows what will happen to rates at a 6 month scope, which was the original question. Given all the turmoil that SGIP and USC have mentioned, it adds even more noise to the equation, not less.
But if you'd like to try to give someone the lottery numbers for next Wednesday, and consider that a valid opinion, go right ahead.
Being smart, doesn't mean fortune telling. Paid opinion or not, no one knows what will happen to rates at a 6 month scope, which was the original question. Given all the turmoil that SGIP and USC have mentioned, it adds even more noise to the equation, not less.
But if you'd like to try to give someone the lottery numbers for next Wednesday, and consider that a valid opinion, go right ahead.
qwerty
Well-known member
IndieDev said:
i agree that no one knows what is going to happen, but like you have said many times before, you can spot trends and make an educated guess. you said you do sophisticated modeling, all that is is coming up with educated inputs to come out with a probable outcome. that is all people here are asking. im sure no one is going to hold it against you if you are wrong. we are all wrong, im not any good at it or my trading account would be a hell of a lot bigger.
in my opinion that turmoil USC and SGIP do add clarity to the equation though. anytime s#it hits the fan around the world money seems to come pouring into treasuries which help keep the rates down. so given all the crap going on around the world it would seem to me that the most probable outcome is that rates would continue to stay low for the 3-6 months and not waste any money on a long-term rate lock.
irvinerealtor
Well-known member
qwerty - You sell yourself short. Your opinions are highly respected, as are USC's.
As for me, I think there are enough Steve Thomas, Gary Watts, (insert the predictor-du-jour here) to go around. They cluck loudly when they've gotten it right, and backtrack/obfuscate/misremember when they haven't.
IMO, it is a far better service to someone to offer the possibilities and options, clarify the possible consequences, and let the client decide. At any price point.
-IR2
As for me, I think there are enough Steve Thomas, Gary Watts, (insert the predictor-du-jour here) to go around. They cluck loudly when they've gotten it right, and backtrack/obfuscate/misremember when they haven't.
IMO, it is a far better service to someone to offer the possibilities and options, clarify the possible consequences, and let the client decide. At any price point.
-IR2
IndieDev
New member
qwerty said:
I'm not saying your opinion is not well thought out. There are people who can come up with well thought out opinions as to why the next card in a game of black jack will be a face card.
You can't compare my opinions on the housing market to my outlook on interest rates. Housing prices generally move in one direction for many years based on numerous market factors. Even in a market of high volatility, like 2006-2007, the shift was subtle, and it took months of slight decline before it went into free fall.
With interest rates, as IR pointed out, even a .25 or .5 swing in a certain direction could have a heavy effect on someones financial situation, and we're talking about scoping over 6 months. 1-3 months, maybe. But 6 months? You better change your name to the Oracle, and start charging for that knowledge.
usctrojancpa
Well-known member
The OP came in here wanting to get some additional input on where rates might go within the next 6 months so SGIP and myself provided our opinions. None of us are fortune tellers or trying to be fortunate tellers, but when someone asks for an educated optinion.....what's the harm in providing it? I'm sure the OP is smart enough to know to take those opinions for what they are worth and make the decision based upon their particular situation and risk tolerance. What makes the forum good is all about various people providing different viewpoints and opinions.
IndieDev
New member
I never claimed that there was harm on your part USC. You know me well enough (through our private communications), that I'm fairly open when it comes to my opinions, I tell it the way I see it, especially if someone is asking me why I think a certain way. People on this forum ask me for my opinion on various subjects all the time. My opinions in this thread aren't personally directed comments, none of them are, so this perceived sensitivity is pointless.
I'm simply defending my stance that a 6 month scope is rolling dice since Qwerty believes I should be fortune telling ( actually worse, at least dice combinations can be reasonably calculated). I am specifically being asked to expand on my opinion.
If other people have a different opinion, then they are free to defend, but people in this thread are specifically asking me to defend my stance, hence my response.
I'm simply defending my stance that a 6 month scope is rolling dice since Qwerty believes I should be fortune telling ( actually worse, at least dice combinations can be reasonably calculated). I am specifically being asked to expand on my opinion.
qwerty said:
If other people have a different opinion, then they are free to defend, but people in this thread are specifically asking me to defend my stance, hence my response.