Interest Rates? Lock in Now or Wait a Couple of Weeks? (mortgage rates, need)
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Our first loan was a VA loan on $84,500 at 14.5% in 1985. The market was dead, so dead, the builder paid off our $2500 in credit card debt. That was for a 3/2.5 split level on a 1/4 acre. Typical starter home, ~1800 sq ft. We sold it 2 years later for $117K.
In 1981 the average yield on a 30 year treasury was 13.45%. So many people who cite those old mortgage rates neglect that factor. It was such a different economy then.
We are seeing quite the decline in rates right now. Free falling and on a Friday. If it holds, Monday should be better, they never go out on a Friday with low quotes for fear of over-committed and the market turn.
My neighbor just told me his interest rate is 2.9 percent. I wonder how many of those loans are out there and how much the banks are losing because of those deals?
I worked at a bank 40 years ago and every morning on the loudspeaker, the Prime Rate was announced. I remember the day it was announced at 20%. You could have heard a pin drop; everyone was stunned.
A co-worker was very excited to have gotten a mortgage for a house with a 9.5% interest rate. We were all so happy for him.
ARMs are no longer a good option. They used to be a way of getting into the market but the banks are losing so much money on those 2.5 percent loans that they have to make it up. An ARM is almost as expensive as the initial 30-year rate.
So, I'd lock in at the 30.
The banks are not losing anything on those low interest loans. Those were sold long ago sold in a portfoliio of higher rate loans and securitized.
I locked in a 15-year loan at 2.5% in 2020. I had no idea how smart that was -- because it wasn't smart, it was just LUCKY!
(The weird thing is, I am still making extra payments, despite the fact that I earn over 5% APR on 4-week t-bills that I keep rolling over ... so I really should be putting more money into THEM. But somehow getting the mortgage PAID OFF feels like a good thing. )
I locked in a 15-year loan at 2.5% in 2020. I had no idea how smart that was -- because it wasn't smart, it was just LUCKY!
(The weird thing is, I am still making extra payments, despite the fact that I earn over 5% APR on 4-week t-bills that I keep rolling over ... so I really should be putting more money into THEM. But somehow getting the mortgage PAID OFF feels like a good thing. )
Wow, I got a 3.25% 15-year refi in 2020 and was happy with that. Since then, I've paid off more than half the balance.
I slowed down and started saving more, but I would like to be mortgage-free in a couple of years, too.
We are probably giving coronaries to the set who think people our age should not have mortgages at all, lol.
Avg. interest rates on 30-yr mortgages slowly getting lower? Just browsing Bankrate.com on occasion.
Anyone in the market right now have any first hand experience?
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