Need suggestion: Mortgage rate lock

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Tom_Irvine_Guy

New member
We have to decided to go with new construction, but it won't be ready until end of December 2014.

I am wondering what interest rates would be like in December 2014 , I hope they will stay low, to current level at least.

My questions are:

1)Has anyone been in this situation?
2)Wells fargo is preferred lender used by builder, they are doing six months lock but at Higher interest rate.  Any suggestions, should i lock the rate now or wait until NOV/December.

Thanks a lot for your help people.





 
Tom_Irvine_Guy said:
We have to decided to go with new construction, but it won't be ready until end of December 2014.

I am wondering what interest rates would be like in December 2014 , I hope they will stay low, to current level at least.

My questions are:

1)Has anyone been in this situation?
2)Wells fargo is preferred lender used by builder, they are doing six months lock but at Higher interest rate.  Any suggestions, should i lock the rate now or wait until NOV/December.

Thanks a lot for your help people.
Click to expand...
Congrats on the new home purchase.  I wouldn't lock now...just wait until you are 45-60 days out.  My guess is that rates will probably stay within a .50% range.  I've never been a fan of paying extra out of pocket to lock a future rate.
 
Once you pull an extended lock with anyone, you're pretty much committed to that lender what with the significant hostage deposit fee you have to pay to get that long term lock. If peace of mind is important, then by all means consider a long term lock.

One thing will be certain: The moment you lock, rates will drop. They won't go down by huge percentage points, but they will drop. You're not closing right after you lock, so the daily rates really aren't important. You'll have to train yourself not to watch rates until you're within your float down window. Don't look at the up front rate, but what your float down terms will be. The majority of lenders have a one time float down so you have to time it wisely. Some questions to ask:

If it's 40 days out will you float down to 45 day pricing, or 60? How about a 30 day price if I'm 30 days out?
So I've locked an ARM, now I want a 30 fixed, what now?
I've changed jobs, but my pay still allows me to qualify, what about my lock?
The builder upgrades have pushed my price up by $75k. Will that change my lock?

Sure, that's a great number of questions - but questions you'll be asking in October anyway when you're wanting to lock.

Long term locks are purchased peace of mind - nothing more. there's a great deal to say though about making your new home transaction a smooth one. 

My .02c
 
Hi all,

Same question, but one year later.  Unlike 2014, it seems that the Feds. are much more likely to raise interest rates this September or October.  My house won't be ready until December '15.  Any advice appreciated.

Thank you in advance.
 
Looking for a superjumbo mortgage. I need to include my current home as a rental (paid off but never rented before) with high FICO.

From what I understand, adjustable rate mortgages get qualified at the rate hike so it's easier to just qualify with a 30 year fixed.

Anyone have lender recommendations?
 
7/1 ARM and 10/1 ARM loan gets qualified at their respective rates, 3/1 ARM and 5/1 ARM get qualified using either the 30-year rate or some normalized rate is my understanding.  Obviously best to speak with a lender, reach out to SGIP. 
 
Hi,

Do you guys see the rates going up before the end of the year based on the last few Fed meetings? -- Also when the fed says they might increase the rates in September / October time frame -- does this mean the Interest rates will go up after the fed rate hike ? maybe in October? or before? -- Also do you guys anticpate the rates to do a steep upwards move or will we be in the close to 4% range?
I know Rates cant be predicted -- but usually the long term watchers can predict the movement.


SGIP -- your insights will be much appreciated. As well as all the other realtors / lenders.

Thanks.
 
sky949 said:
Hi,

Do you guys see the rates going up before the end of the year based on the last few Fed meetings? -- Also when the fed says they might increase the rates in September / October time frame -- does this mean the Interest rates will go up after the fed rate hike ? maybe in October? or before? -- Also do you guys anticpate the rates to do a steep upwards move or will we be in the close to 4% range?
I know Rates cant be predicted -- but usually the long term watchers can predict the movement.


SGIP -- your insights will be much appreciated. As well as all the other realtors / lenders.

Thanks.
Click to expand...

Yes and yes.  Indications are that the Feds are going to raise rates at least twice by the end of the year...10 year yields have been raising slowly because of it.  I expect rates to be in the 5% range.
 
This should prove interesting for the new homes coming out, rates go up, purchasing power goes down, can't count on 100% fcb's...
Will this turn into when Sonoma opened at Woodbury, sales stalled like crazy, eventually sold out as rates went down, unlike then, I don't think rates will go down long term
 
Irvinecommuter said:
sky949 said:
Hi,

Do you guys see the rates going up before the end of the year based on the last few Fed meetings? -- Also when the fed says they might increase the rates in September / October time frame -- does this mean the Interest rates will go up after the fed rate hike ? maybe in October? or before? -- Also do you guys anticpate the rates to do a steep upwards move or will we be in the close to 4% range?
I know Rates cant be predicted -- but usually the long term watchers can predict the movement.


SGIP -- your insights will be much appreciated. As well as all the other realtors / lenders.

Thanks.
Click to expand...

Yes and yes.  Indications are that the Feds are going to raise rates at least twice by the end of the year...10 year yields have been raising slowly because of it.  I expect rates to be in the 5% range.
Click to expand...

close to 5% by september / october or later next year?
 
sky949 said:
Irvinecommuter said:
sky949 said:
Hi,

Do you guys see the rates going up before the end of the year based on the last few Fed meetings? -- Also when the fed says they might increase the rates in September / October time frame -- does this mean the Interest rates will go up after the fed rate hike ? maybe in October? or before? -- Also do you guys anticpate the rates to do a steep upwards move or will we be in the close to 4% range?
I know Rates cant be predicted -- but usually the long term watchers can predict the movement.

SGIP -- your insights will be much appreciated. As well as all the other realtors / lenders.

Thanks.
Click to expand...

Yes and yes.  Indications are that the Feds are going to raise rates at least twice by the end of the year...10 year yields have been raising slowly because of it.  I expect rates to be in the 5% range.
Click to expand...

close to 5% by september / october or later next year?
Click to expand...

If we see 5% by Sept/Oct, I doubt new construction in Irvine will be able to sell well. That is a 25% rise in rates from 4% in 3-4 months time  and rates have already been bumping up.

 
AW said:
This should prove interesting for the new homes coming out, rates go up, purchasing power goes down, can't count on 100% fcb's...
Will this turn into when Sonoma opened at Woodbury, sales stalled like crazy, eventually sold out as rates went down, unlike then, I don't think rates will go down long term
Click to expand...

It will be  interesting to see if the rate reaches  6% within the next 2 year.  >:D
 
Then we'll never see Eastwood being built and OH 2, well, maybe my kids will see it built, lol
 
If prices hold up and rates rise you can still see them built if either FCB don't care that others can't afford the payments and just buy everything or salaries rise.




 
I think the impacts rising rates will have on the housing industry (as well as the more global monetary issues and low global interest rates) will both prevent FEd from hiking rates as quick as people expect. If rates are at 5% < 6 months from now, the housing market will be non-existent and their will be a decent amount of standing inventory, imo. 
 
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