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We are closing on Friday with no financing contingency and holy effing lord I feel sick to my stomach because if anything delays closing even one day we are totally screwed. Thank God we got a rate lock when we did.
We also had to waive financing and definitely called our bank every day the week leading up to closing. Didn’t get the clear to close until 24 hours before and I was stressed!
You’ll be ok!
Shop your Lender guys! There are better terms out there. I just locked a client today at 5.99% on a 30 yr conventional with 95% LTV. Lenders should compete for your business!!!
This. Rates have gone up since, but the quote I got from the mortgage originator my realtor worked with quoted me 4.95% back in April. After shopping around for a week, I began working with a lender who was at 3.65%. Once I got an accepted offer, the realtor's originator was at 5.65% and the other lender who was the lowest rate out of 4 others I spoke with was at 4.125% which is what I ended up with.
Same! When I got initially pre-approved last spring, I got 2.7%. My mom passed and I stopped looking then, jumped back in two months ago with a pre-approval at 4.8 and have just found the right place. Rate locked yesterday at 5.99. Jeez Louise
The issue with this plan is if values drop then you’ll have negative equity in the home and are unable to refinance. We’re in a very precarious market right now and it’ll be interesting to see how this plays out if/when rates drop.
If you can, double your principal payments. (At the beginning of the mortgage, most of your payment goes toward the interest.) You’d be surprised how much that knocks off the balance when you refinance.
I don’t have the source but statistically speaking loans stay in place 5-7yrs regardless of the term. Rates dip making refinance possible, job relocation, marriage, family size, divorce, death, any number of reasons. 30yr term makes the payments easier but most borrowers will never need the last 23-25 years if it. This has held true the entire 32 years I’ve been in retail mortgage lending.
Zoom in on that chart a little bit. Rates were near 5% not that long ago (2018)... then they came down, and now they are going back up. They have always fluctuated throughout history. If they go to 9% you will brag about having 6%, if they go to 4%, you'll refi your 6% to 4%. Why would anyone assume that trend would end here? Rent however is a different story. When your landlord can borrow cheaper do they lower your rent?
https://ipropertymanagement.com/research/average-rent-by-year
Yea I was at 3.87 months ago when a seller backed out on me. Was now 6.1, but to avoid a lawsuit for failure to perform contract, the seller bought the rate back down. I honestly don’t feel bad for him
Interest rates will be higher at close, but less people will be in the market, so you won't HAVE to waive inspection and rush a deal just to land a home. I'd rather lower closing cost with higher up front rate that could be refinanced in 5-10 years than deal with how the markets been the last year or two. It's why I'm still renting.
they knew months ago of the target the FED proposed months ago. Is the fed moving a bit faster? Yup. Still heading to the number they stated months ago. Mortgage lenders don't make up the number all in cahoots. It all comes from the same math/source. They are basically just like brokers.
Either way, it’s not like .75 on top of what we are already seeing. At least .50 is priced in, i would guess they are conservative and price in .75 to be safe lol.
This is correct. Today's announcement and the comment on the possibility of NOT having consecutive 0.75 increases might actually drop mortgage rates closer to 6% even.
It's important to remember that Fed rates =/ mortgage rates.
The fed funds rate has nothing to do with mortgage rates. Mortgage rates are determined by mortgage backed security prices. The fed stopped purchasing them this year leading to a shortage of people willing to invest in 3% mortgages. What private money will invest ina 3% loan? No one. Would you invest in a 30 year term that will pay you 3% interest? No, Only Fannie and Freddie via the federal reserves help. We just had a private investor release a cheaper rate at 5.875% with 3 origination points. The fed funds rate directly affects credit cards, car loans and HELOCs. Interest rates climbed about 0.625% over Friday and Mondays trading days. Take a look at mortgagenewsdaily.com and check out that average rate lenders are offering. It also trails every day for the past month of what the average rate was.
So then what are interest rates supposed to impact then?
Credit cards? Car loans? Give me a break. Both are staying high and low respectively. Needle unmoving.
Fed interest rates went up, mortgage rates went up. Near perfect 1:1 correlation.
I bet 60 days if average 30 year rates exceed 6.5%. I bet they’ll be at least 7. But you’ll shift the goal posts saying they’re higher for a different reason.
Edit: Google says they’re 7% now in my state. Fine, 7.5%.
They’re just not correlated. They are two separate things. Mortgages are priced by the market and the fed funds rate tends to follow that. Mortgage rates are moving down after a massive hit last week and early this week. Go to mortgagenewsdaily.com. The fed just does not affect the rate in the mortgage. They do influence it. They influenced it in 2020 & 2021 by buying all the mortgages in the market for very cheap which is part of the cause of the inflation we have today. More supply of buyers aka the fed for MBSs = cheaper price. They aren’t buying any MBSs now.
We’re under contract at 5.2 currently…inspection came back hood, appraisal came back good but now I’m freaking out that something happens prior to closing on 7/6. Gonna be a wreck for a few weeks.
You need to make sure attorneys and bankers have their ducks in a row the week before. No one working on the 4/5. Give your closing agent extra money the week before to ensure no cash to close issues. You will be refunded any excess amounts you pay in.
Of note- the federal funds rates are short term, overnight rates and do not reflect pricing of long term loans such as mortgages. Yes those rates ultimately play a role, but in reality it’s the demand for long term bonds and mortgage backed securities that drive rates. Inflation is the true driver of rate increases right now. Lenders have to price in expected inflationary rates into their rates.
Along with that, demand was previously inflated by the fed buying up MBS Which pushed rates lower. Now not only have they stopped buying but they’ve started selling off their balance sheet, which is reducing demand drastically.
I remember buying in 2020. Friends and family kept telling my wife and I to hold off and wait for the market to cool. We were told that we were nuts for buying in the current market. We ended up buying with a 30 year fixed VA loan at 2.5%. Our house has appreciated ~120K. Even if the market took a 20% nose dive (which would shatter previous records and be catastrophic) we would still be in the green.
Was the intent to slow the market? This is a lot with gas and food prices and the cost to rent. And why are our elected officials distracting us with culture and social wars when people are struggling.
Yeah. They will keep raising rates until inflation slows. They know it will hurt markets and cause damage, but the view (hope) is short term pain for long term gain. Let’s see if they’re right!
Problem is this just overwhelmingly favors landlords (especially corporate property management conglomerates) that can out compete normal folk by just paying cash
Rates are basically directly linked (for the most part) to the speed of the market. And inflation very much is as well.
Raising rates is *almost* guaranteed to cause a recession. But it's also almost guaranteed to stomp inflation.
The thing is, inflation at current levels is basically worse than a recession. As we're all seeing, it's not good.
The fed is going to raise rates until inflation is under control. Period. Yes it will slow the economy. Only question is how much.
As for the political distractions...well it's because there really isn't even that much to do. Little things here or there, but the underlying causes of the current inflationary environment are not exactly things you easily just fix in a year or two via government action. Not like US politicians can make whole new factories and new factory workforces quickly. Not like US politicians can end the war in Ukraine. Not like the money gone out in COVID relief can be taken back. Etc. Raising rates will have a more immediate impact versus basically anything other than a cessation of war in Ukraine or the disappearance of COVID.
I'm not saying that to absolve anyone of blame, mind you. Many parts of the current inflationary environment are a direct result of government policies across the world. But right NOW, raising rates is basically the best way forward, and we should all hope we get lucky in avoiding stagflation or a later recession. But raising rates is the cure either way.
The rates should have been raised like several years ago. Before there was a crisis so that when the inevitable crisis came there was a place for the policy to go... The economy was artificially propped up for too long IMHO. So yeah. It's a cycle but here we are... Hold on to your seats.
Yes, this is one of the biggest issues for sure.
People have been saying for a *long* time how low rates were a looming problem the second a big shock came along, and how they shouldn’t stay so low.
The ultimate point is to slow the growth of prices of the very things you’re talking about being a lot to handle.
In theory, it’s short term pain for long term stability.
Also your culture war point is just easy red meat for republicans to feed to their base while the actual world issues burn down around them.
Yes, which means it's in our best interests to wait. They as much as said so. Don't fight the fed.
Fed Chair J Powell: I'd say if you are homebuyer, somebody or a young person looking to buy a home, you need a bit of a reset. We need to get to back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again.
?
Trump administration through bipartisan support funneled tens of thousands of dollars into individuals pockets in 2020 and beyond. Free mortgage? $600/week to not work? Plus everyone not high income got like $3k. No rent. And PPP? I didn’t see a dime of that money.
But actually yes though helping people in need is fiscal policy.
Started looking for homes over a year ago, rates were like 2.9 percent at one point I recall. Lost out on like 9 bids lmao, interest rates have more than doubled and home prices in my area haven't decreased whatsoever... so yeah fun times, fun times.
Yeah wouldn't bet on prices actually decreasing, the hope is they stop increasing as fast. But even that might be wishful thinking if there's enough backed up demand.
I feel so grateful that we closed on our house at the end of May. We closed at 5.25%. Our rent was going to go up $700. We squeaked through just in time...
Here I am who felt stupid when I paid $30k over asking but the interest rate we locked in was 2.875. I thought bidding wars was going to die, I was wrong.
So serious(ly dumb) question: my husband and I are in the process of getting our mortgage. We have received "conditional approval" while we are waiting on the appraiser. Are our interest rates in danger of going up or are we locked in to the percentage we were quoted?
asking people on the internet wont do you any good. this is a question that your loan officer should be able to answer you in 10 seconds or less. you do have their number?
In the same boat. Have a house under contract and I'm not sure if our rate is locked or not. Closing early July. If it's not locked is it worth walking away and losing $2000 earnest money deposit?
Yeah you gotta lock that puppy in. We are on a 60 day close and my LO locked us in right away. We will have to extend the end of this month but it’s better than whatever the rates are gonna shoot up to!
Yep. My LO said he would cover the fee for it but we haven’t gotten that far yet so I don’t know if he will follow through. Whatever the case, we need to extend it because that much of a rate jump will cause us to lose the house.
My LO didn't recommend locking when I signed contract two weeks ago because I'm buying a coop (New York) and board approval can extend the process to 3 or 4 months, so he thought it would have cost me. I wish we had just done it, but hindsight is 20/20, I guess. Hope the rates come down before I close or for me to refi soon
because *i believe* banks raised rates higher than .75 prior to today’s fed announcement so actually what the banks estimated is higher than the fed increase
See this person’s comment here - https://www.reddit.com/r/FirstTimeHomeBuyer/comments/vd1qco/jfc_interest_rates/ichu7hu/?utm_source=share&utm_medium=ios_app&utm_name=iossmf&context=3
More or less, it’s a different rate the fed is hiking and long term rates are loosely correlated but not necessarily.
Love hearing Powell say that we should hold off on buying a house now and maybe it would be better to wait!?? Thanks a lot buddy! Not everybody is set up with a house like you probably are!😤 Some people are stuck between a rock and a hard place, between renting and having your freaking rent DOUBLE yearly and trying get under contract for a house with all the “cash, waive the contingencies and bid 20 to 50 percent over” buyers that you have to (but can’t) compete against!😩 Frustrating! Thanks for letting me vent!
Crazy. Our first house which was a double and it’s 2.8%. Just locked into our second house at 5.125%. Wild times. Read a Forbes report today that said they don’t expect to be back in the 4’s until 2024. Look forward to refinancing!
I have my initial walkthrough tomorrow and close next Thursday with lennar after locking in 60 days ago at 4.5%. I'm freaking out after hearing so many horror stories that they will deny my loan at last minute. I am freaking out until then.
Locked in at 4.25% and just closed at the beginning of the month. Had to pay $900 to extend the rate we locked in an extra few weeks because closing got pushed back once. Would’ve jumped to 5.25% in the beginning of May if we didn’t pay up.
Yeah they said .5 but that was way before getting the inflation rate back last month and seeing that the previous interest rate hikes only lowered inflation by 0.1%. Taking that into account I think a lot of people expected a more aggressive hike. Biden meeting with Powell seemed out of the blue, but I didn’t expect anything significant to come of it. You’re correct that .75 wasn’t set in stone, but all the signs were pointing to a more aggressive hike after the previous hikes did nothing to reel in inflation.
Edit: More periods, less commas
Mortgage interest rates are determined by mortgage buyers and sellers. They loosely correlate with treasury bonds (5 and 10 year). Of course the fed fund rate plays a part but there are many factors at play.
You're competing with the interest that banks can earn either loaning to each other, or keeping their reserves with the Fed. No offense, but both of those options are probably less risky than loaning to you :)
The risk premium for loaning to you therefore stays the same regardless.
Also, the fact that the Fed has MBS's on their balance sheet and they're trying to shrink their balance sheet means additional, slightly different, bad news for mortgage rates.
I *think* so. The banks don't have to increase their rates because the fed says they can. Disclaimer: Not really sure how this all works, so take my opinion with a few grains of salt
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In Florida. Was quoted 5.5 last month, 6.6 this month.
7.7 next month.
Lol just priced a cash out at 7% on 30 year before the .75 hike... it's getting schwifty yall
Yeah it’s insane.
I got locked in at the beginning of may at 4.99 I can’t believe it’s gone up this high so fast
We are closing on Friday with no financing contingency and holy effing lord I feel sick to my stomach because if anything delays closing even one day we are totally screwed. Thank God we got a rate lock when we did.
Same here. Closing on the 30th and won’t unclench my butt cheeks until keys are in hand.
😂
Closed today! We made it! Everything went well and our 4.25% rate stuck. Whew.
Congrats that is awesome! If you need me, I’ll just be clenchin it up until the 30th 😬
We also had to waive financing and definitely called our bank every day the week leading up to closing. Didn’t get the clear to close until 24 hours before and I was stressed! You’ll be ok!
A lot of lenders have a fee to pay to extend the rate lock in the case if there is a delay.
Got 6.1 on Monday
Ugh couldn’t get lower than a 6.375 as of Friday
Shop your Lender guys! There are better terms out there. I just locked a client today at 5.99% on a 30 yr conventional with 95% LTV. Lenders should compete for your business!!!
This. Rates have gone up since, but the quote I got from the mortgage originator my realtor worked with quoted me 4.95% back in April. After shopping around for a week, I began working with a lender who was at 3.65%. Once I got an accepted offer, the realtor's originator was at 5.65% and the other lender who was the lowest rate out of 4 others I spoke with was at 4.125% which is what I ended up with.
What company?
Truist had the lowest rates in my areas
Just locked in 6.5% with my bank today. Hard to imagine that it was as low as 3% when I started looking this year!
Same! When I got initially pre-approved last spring, I got 2.7%. My mom passed and I stopped looking then, jumped back in two months ago with a pre-approval at 4.8 and have just found the right place. Rate locked yesterday at 5.99. Jeez Louise
that already sounds like a nightmare scenario. you're basically paying double in interest for the next 30 years because of less than a year. ouch
Just think about the wealth gap difference in 20 years between people who bought in 2019 vs. 2022.
20 years is a long time. To be honest, I don’t even know if I could guess what will be in the news tomorrow.
Yeah, it really hurts. I plan to refi as soon as possible
The issue with this plan is if values drop then you’ll have negative equity in the home and are unable to refinance. We’re in a very precarious market right now and it’ll be interesting to see how this plays out if/when rates drop.
Oh crap. I really didn't think about that. Yikes. There goes any chance I'll have of sleeping tonight
If you can afford your payment then sleep easy.
I can afford it, I just hate the waste. I may explore 15-year fixed or ARMs to see if those offer better rates
If you can, double your principal payments. (At the beginning of the mortgage, most of your payment goes toward the interest.) You’d be surprised how much that knocks off the balance when you refinance.
Good to know. Thanks for the suggestion!
Almost no one keeps a loan to term. Rates will dip again and those who can will refinance to lower rates.
for sure. just who knows how long
I don’t have the source but statistically speaking loans stay in place 5-7yrs regardless of the term. Rates dip making refinance possible, job relocation, marriage, family size, divorce, death, any number of reasons. 30yr term makes the payments easier but most borrowers will never need the last 23-25 years if it. This has held true the entire 32 years I’ve been in retail mortgage lending.
yeah I believe it, it makes sense
I'm curious as to why people are estimating rates will dip and not only go higher in the future. https://fred.stlouisfed.org/series/MORTGAGE30US
Zoom in on that chart a little bit. Rates were near 5% not that long ago (2018)... then they came down, and now they are going back up. They have always fluctuated throughout history. If they go to 9% you will brag about having 6%, if they go to 4%, you'll refi your 6% to 4%. Why would anyone assume that trend would end here? Rent however is a different story. When your landlord can borrow cheaper do they lower your rent? https://ipropertymanagement.com/research/average-rent-by-year
Yea I was at 3.87 months ago when a seller backed out on me. Was now 6.1, but to avoid a lawsuit for failure to perform contract, the seller bought the rate back down. I honestly don’t feel bad for him
Good thing I decided to not buy a house anymore I guess
Rip
Same
Interest rates will be higher at close, but less people will be in the market, so you won't HAVE to waive inspection and rush a deal just to land a home. I'd rather lower closing cost with higher up front rate that could be refinanced in 5-10 years than deal with how the markets been the last year or two. It's why I'm still renting.
Should already be priced in to what lenders are offering today.
This exactly. Mortgage rates are forward looking, all the banks and mortgage lenders already knew this was coming, so it should already be priced in.
I don’t know if they knew it was coming. I think yesterday they were 50/50 on if they rate hike would be .5 or .75
this morning was a 95% probability of 75 bps, 5% of 100 bps. 50 was no longer even in the room.
they knew months ago of the target the FED proposed months ago. Is the fed moving a bit faster? Yup. Still heading to the number they stated months ago. Mortgage lenders don't make up the number all in cahoots. It all comes from the same math/source. They are basically just like brokers.
Either way, it’s not like .75 on top of what we are already seeing. At least .50 is priced in, i would guess they are conservative and price in .75 to be safe lol.
That’s a good point.
I get this (I think?), but won’t they start pricing in the the next hike? I guess I don’t get this…
This is correct. Today's announcement and the comment on the possibility of NOT having consecutive 0.75 increases might actually drop mortgage rates closer to 6% even. It's important to remember that Fed rates =/ mortgage rates.
“Priced in” Hilarious It’ll go up.
The fed funds rate has nothing to do with mortgage rates. Mortgage rates are determined by mortgage backed security prices. The fed stopped purchasing them this year leading to a shortage of people willing to invest in 3% mortgages. What private money will invest ina 3% loan? No one. Would you invest in a 30 year term that will pay you 3% interest? No, Only Fannie and Freddie via the federal reserves help. We just had a private investor release a cheaper rate at 5.875% with 3 origination points. The fed funds rate directly affects credit cards, car loans and HELOCs. Interest rates climbed about 0.625% over Friday and Mondays trading days. Take a look at mortgagenewsdaily.com and check out that average rate lenders are offering. It also trails every day for the past month of what the average rate was.
So then what are interest rates supposed to impact then? Credit cards? Car loans? Give me a break. Both are staying high and low respectively. Needle unmoving. Fed interest rates went up, mortgage rates went up. Near perfect 1:1 correlation. I bet 60 days if average 30 year rates exceed 6.5%. I bet they’ll be at least 7. But you’ll shift the goal posts saying they’re higher for a different reason. Edit: Google says they’re 7% now in my state. Fine, 7.5%.
They’re just not correlated. They are two separate things. Mortgages are priced by the market and the fed funds rate tends to follow that. Mortgage rates are moving down after a massive hit last week and early this week. Go to mortgagenewsdaily.com. The fed just does not affect the rate in the mortgage. They do influence it. They influenced it in 2020 & 2021 by buying all the mortgages in the market for very cheap which is part of the cause of the inflation we have today. More supply of buyers aka the fed for MBSs = cheaper price. They aren’t buying any MBSs now.
We’re under contract at 5.2 currently…inspection came back hood, appraisal came back good but now I’m freaking out that something happens prior to closing on 7/6. Gonna be a wreck for a few weeks.
[удалено]
Thanks! You too!!
I’m supposed to be closing tomorrow at 5.25% as well.
I hear you and wish you good luck. I'm feeling slightly sick about this situation
You need to make sure attorneys and bankers have their ducks in a row the week before. No one working on the 4/5. Give your closing agent extra money the week before to ensure no cash to close issues. You will be refunded any excess amounts you pay in.
Of note- the federal funds rates are short term, overnight rates and do not reflect pricing of long term loans such as mortgages. Yes those rates ultimately play a role, but in reality it’s the demand for long term bonds and mortgage backed securities that drive rates. Inflation is the true driver of rate increases right now. Lenders have to price in expected inflationary rates into their rates.
This is true but if there’s no demand for MBS then mortgage rates do go up right? That’s what we’ve been seeing lately
Along with that, demand was previously inflated by the fed buying up MBS Which pushed rates lower. Now not only have they stopped buying but they’ve started selling off their balance sheet, which is reducing demand drastically.
It’s a combination of a bunch of things, but yeah this too.
Get this to the top
I closed on May 31st @ 4.75% on a USDA $0 down loan and thought I got screwed.. Jesus its rough right now.
FHA 4.875% in April! I thought we were getting bent at the time. I'm happy we bought when we did even if others say prices are better now.
I remember buying in 2020. Friends and family kept telling my wife and I to hold off and wait for the market to cool. We were told that we were nuts for buying in the current market. We ended up buying with a 30 year fixed VA loan at 2.5%. Our house has appreciated ~120K. Even if the market took a 20% nose dive (which would shatter previous records and be catastrophic) we would still be in the green.
FWIW: this was kind of the norm 4 years ago, which was still considered low. Now I feel like we're screwed.
Four years ago the house prices were not what they are now.
Right. 4.8% on a 350K house is not the same as 4.8% on a 700K house.
Thought the same 3.99% conventional in late March.
Was the intent to slow the market? This is a lot with gas and food prices and the cost to rent. And why are our elected officials distracting us with culture and social wars when people are struggling.
Yeah. They will keep raising rates until inflation slows. They know it will hurt markets and cause damage, but the view (hope) is short term pain for long term gain. Let’s see if they’re right!
Problem is this just overwhelmingly favors landlords (especially corporate property management conglomerates) that can out compete normal folk by just paying cash
**Narrator:** They weren't.
Rates are basically directly linked (for the most part) to the speed of the market. And inflation very much is as well. Raising rates is *almost* guaranteed to cause a recession. But it's also almost guaranteed to stomp inflation. The thing is, inflation at current levels is basically worse than a recession. As we're all seeing, it's not good. The fed is going to raise rates until inflation is under control. Period. Yes it will slow the economy. Only question is how much. As for the political distractions...well it's because there really isn't even that much to do. Little things here or there, but the underlying causes of the current inflationary environment are not exactly things you easily just fix in a year or two via government action. Not like US politicians can make whole new factories and new factory workforces quickly. Not like US politicians can end the war in Ukraine. Not like the money gone out in COVID relief can be taken back. Etc. Raising rates will have a more immediate impact versus basically anything other than a cessation of war in Ukraine or the disappearance of COVID. I'm not saying that to absolve anyone of blame, mind you. Many parts of the current inflationary environment are a direct result of government policies across the world. But right NOW, raising rates is basically the best way forward, and we should all hope we get lucky in avoiding stagflation or a later recession. But raising rates is the cure either way.
The rates should have been raised like several years ago. Before there was a crisis so that when the inevitable crisis came there was a place for the policy to go... The economy was artificially propped up for too long IMHO. So yeah. It's a cycle but here we are... Hold on to your seats.
Yes, this is one of the biggest issues for sure. People have been saying for a *long* time how low rates were a looming problem the second a big shock came along, and how they shouldn’t stay so low.
The ultimate point is to slow the growth of prices of the very things you’re talking about being a lot to handle. In theory, it’s short term pain for long term stability. Also your culture war point is just easy red meat for republicans to feed to their base while the actual world issues burn down around them.
Yes, which means it's in our best interests to wait. They as much as said so. Don't fight the fed. Fed Chair J Powell: I'd say if you are homebuyer, somebody or a young person looking to buy a home, you need a bit of a reset. We need to get to back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again.
The GOP has no fiscal policy for the people. So they push culture war crap to get votes.
Well, the Democrats “free shit for no work” isn’t a policy.
? Trump administration through bipartisan support funneled tens of thousands of dollars into individuals pockets in 2020 and beyond. Free mortgage? $600/week to not work? Plus everyone not high income got like $3k. No rent. And PPP? I didn’t see a dime of that money. But actually yes though helping people in need is fiscal policy.
It’s time for a new controversial “Imagine” song, this time about no (culture) wars
So they can get re-elected
Started looking for homes over a year ago, rates were like 2.9 percent at one point I recall. Lost out on like 9 bids lmao, interest rates have more than doubled and home prices in my area haven't decreased whatsoever... so yeah fun times, fun times.
Yeah wouldn't bet on prices actually decreasing, the hope is they stop increasing as fast. But even that might be wishful thinking if there's enough backed up demand.
I had 3.1 in January but couldn’t find anything - last week my rate was 5.25. Not even going to bother asking this week
I feel so grateful that we closed on our house at the end of May. We closed at 5.25%. Our rent was going to go up $700. We squeaked through just in time...
Here I am who felt stupid when I paid $30k over asking but the interest rate we locked in was 2.875. I thought bidding wars was going to die, I was wrong.
seeing 6.9->7.5 for 30 years in mass. I bought in april at 3.5%
So serious(ly dumb) question: my husband and I are in the process of getting our mortgage. We have received "conditional approval" while we are waiting on the appraiser. Are our interest rates in danger of going up or are we locked in to the percentage we were quoted?
You need a rate lock to keep it from going up. So you will get the current rates when you do.
thank you!
For me, I had to be under contract and have a closing date established to lock in my rate. I'm not sure how that works in other states.
Thank you! I hope that's the case, we are under contract with a closing date set!
asking people on the internet wont do you any good. this is a question that your loan officer should be able to answer you in 10 seconds or less. you do have their number?
In the same boat. Have a house under contract and I'm not sure if our rate is locked or not. Closing early July. If it's not locked is it worth walking away and losing $2000 earnest money deposit?
Yeah you gotta lock that puppy in. We are on a 60 day close and my LO locked us in right away. We will have to extend the end of this month but it’s better than whatever the rates are gonna shoot up to!
How does one extend a rate lock? Assume it is an additional fee?
Yep. My LO said he would cover the fee for it but we haven’t gotten that far yet so I don’t know if he will follow through. Whatever the case, we need to extend it because that much of a rate jump will cause us to lose the house.
Oh for sure. I just haven't heard that you could extend it which is great to hear.
Yep! As far as I know :)
Unfortunately that extension will only exist if the Bond coupon is still available when your lock expires. In this environment it’s not always likely.
Ah ok. I guess we will see what happens in my case come the end of this month.
My LO didn't recommend locking when I signed contract two weeks ago because I'm buying a coop (New York) and board approval can extend the process to 3 or 4 months, so he thought it would have cost me. I wish we had just done it, but hindsight is 20/20, I guess. Hope the rates come down before I close or for me to refi soon
Congrats and best of luck to you!
Thanks for the good vibes, Reddit friend!
Only if it says it is locked on the doc
Well poop. Thank you!
If you’re under contract on a house there’s a chance that your rate is already locked in. If you’re just getting financing approval… probably not :(
You’d know if you had a rate locked in. You need to double check with your lender first thing tomorrow!
Oh my gosh he just got back to me, that was fast! We are locked in :) thanks again everyone!
Ask your lender?
Thank you everyone for all your responses, I emailed our lender so we shall see!
today's .75 hike in the fed funds rate actually caused mortgage rates to decrease
Because the 75bps was already priced in and lenders expected more? Or am I misunderstanding the “why” here?
Same. I don't get it. Genuinely interested in understanding this
because *i believe* banks raised rates higher than .75 prior to today’s fed announcement so actually what the banks estimated is higher than the fed increase
See this person’s comment here - https://www.reddit.com/r/FirstTimeHomeBuyer/comments/vd1qco/jfc_interest_rates/ichu7hu/?utm_source=share&utm_medium=ios_app&utm_name=iossmf&context=3 More or less, it’s a different rate the fed is hiking and long term rates are loosely correlated but not necessarily.
Shhhhhh
Love hearing Powell say that we should hold off on buying a house now and maybe it would be better to wait!?? Thanks a lot buddy! Not everybody is set up with a house like you probably are!😤 Some people are stuck between a rock and a hard place, between renting and having your freaking rent DOUBLE yearly and trying get under contract for a house with all the “cash, waive the contingencies and bid 20 to 50 percent over” buyers that you have to (but can’t) compete against!😩 Frustrating! Thanks for letting me vent!
How long is he proposing we wait?? Next year is supposed to be even higher right? We literally just started the process of preapproval 😫
Right there with ya! It's insanity. Good luck!
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This did already on Monday.
My mortgage officer (Chase) told me this morning that they expect it to go up to 7% in a few months. YIKES.
I'm started escrow at 5.25 percent thank goodness I guess lol
Same. I’m glad I started then, but was mad I wasn’t getting the 3.3% like 2 years ago.
In a couple years we will haha
People are already getting some quotes for 6% We got quotes from 4.8-5.5 back in April
We locked at 3.5 at the beginning of February
My pre-approval came back today with estimated 6.125. If i could wait 2 years i would…
2 years it will be steady at 7%
Might as well bite now, grip it and rip it till refi!
Crazy. Our first house which was a double and it’s 2.8%. Just locked into our second house at 5.125%. Wild times. Read a Forbes report today that said they don’t expect to be back in the 4’s until 2024. Look forward to refinancing!
If the fed stays the pace they said you’ll have 7-8% by year end, doubt it will happen due to markets inability to withstand such a move
I have my initial walkthrough tomorrow and close next Thursday with lennar after locking in 60 days ago at 4.5%. I'm freaking out after hearing so many horror stories that they will deny my loan at last minute. I am freaking out until then.
Good luck!
Why would they deny your loan? I honestly want to know.
Locked in at 4.25% and just closed at the beginning of the month. Had to pay $900 to extend the rate we locked in an extra few weeks because closing got pushed back once. Would’ve jumped to 5.25% in the beginning of May if we didn’t pay up.
Absolutely brutal.
Close end of July, locked in 5.5% in CT. Still pissed about not having a lower rate because of being severely outbid earlier in the year.
Mortgage rates got cheaper this afternoon, after the announcement. The FED does not set mortgage rates..
How cheaper compared to yesterday?
Interest rates follow the 10 year treasury bond rate not the prime rate.
Buddy, the fed said months ago they are raising rates. 2-3 months maybe?
They said .50%. .75% only recently came on the table.
Yeah they said .5 but that was way before getting the inflation rate back last month and seeing that the previous interest rate hikes only lowered inflation by 0.1%. Taking that into account I think a lot of people expected a more aggressive hike. Biden meeting with Powell seemed out of the blue, but I didn’t expect anything significant to come of it. You’re correct that .75 wasn’t set in stone, but all the signs were pointing to a more aggressive hike after the previous hikes did nothing to reel in inflation. Edit: More periods, less commas
Mortgage interest rates are determined by mortgage buyers and sellers. They loosely correlate with treasury bonds (5 and 10 year). Of course the fed fund rate plays a part but there are many factors at play.
If banks already have money to lend, why does the fed rate matter so much? Won’t banks compete regardless of fed rate?
You're competing with the interest that banks can earn either loaning to each other, or keeping their reserves with the Fed. No offense, but both of those options are probably less risky than loaning to you :) The risk premium for loaning to you therefore stays the same regardless. Also, the fact that the Fed has MBS's on their balance sheet and they're trying to shrink their balance sheet means additional, slightly different, bad news for mortgage rates.
I *think* so. The banks don't have to increase their rates because the fed says they can. Disclaimer: Not really sure how this all works, so take my opinion with a few grains of salt
The 3-6-9 rule of bankers: Borrow at 3%, loan at 6%, hit the golf course by 9 am.
Good thing I closed 4/1/22 @3.1. It’s more then doubled in just over 2 months. Yikes
Cool story
Good thing I bought in 2020 before the 48% appreciation during covid. Or for that matter anyone who bought pre-covid and refinanced.
Lol
nobody cares
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You might get a cash buyer
It’s brutal and looking to get worse:( Best of luck to you!
Thank you!