i looked on yahoo and the standard 30-year rate is at 6.1%. seems like in early january the rate was 5.6%. does anyone know of where to look to get an idea on whether or not the rates will go up or down in the upcoming months?

4/23/2006 10:08:31 PM

I would say up.

And btw:

If you are consulting TWW for serious personal or business financial decisions you are considerably fucked.

4/23/2006 10:11:58 PM

joerrad i think it will go up for a bit more then take a dip for a while. depends on how the stock market does to drive bonds.

there's really no way to tell man.

4/23/2006 10:14:00 PM

up

4/23/2006 10:15:45 PM

thanks for the comment eraser. if you read my post you would notice i said "where to look to get an idea." i wasnt asking for advice but basically for someone to point me into the right direction. your sarcasm was noted but poorly driven.

4/23/2006 10:17:44 PM

^ I was just playing.

I am about to buy a house too but bous hit the nail on the head:

Quote :

"there's really no way to tell man."

If you find a source that says they know what the interest rate will be in the future they are either incredible liars or you should hook me up (if they aren't making shit up that is) ...

[Edited on April 23, 2006 at 10:24 PM. Reason : +]

4/23/2006 10:23:16 PM

The fed bumped the rates multiple times since january, which is why mortgage rates are higher now. The fed has said that this is it for a while, so mortgage rates should also be flat for now.

4/23/2006 11:15:54 PM

no flat is not an option. the rates must move up or down

they are like sharks

4/23/2006 11:18:04 PM

Don't count on them going down much. The last few years mortgage rates were at there lowest in 30 years (see http://mortgage-x.com/general/indexes/prime.asp for a history of prime rate). You will also notice a good chunk of time where the rates stayed in the double digits. Definitely get in now and go fixed rater (a variable APR is OK for a small second mortage, if you must, but look to see what kind of caps it has and such).

4/23/2006 11:35:02 PM

This really isn't worth worrying about enough to affect your decision to buy right now given that you are taking out a small loan and not making some multi-million dollar transaction...

If you are in the market to buy a house, you should do it when you find a house that is of good value to you.

Over the course of the next year its pretty unlikely the interest rate will have varied by more than half a point.

Look at how little this will actually affect your loan...

At 6.1% a $130,000 loan will cost you $153,900.

At 5.6% a $130,000 loan will cost you $140,450

At 6.6% a $130,000 loan will cost you $170,750



So in your best case scenario by waiting there you save a measly $13,500... Keep in mind that inflation will cut into this figure significantly and your real savings would be around $10,000.

Next, factor in the $300-$700 rent per month you would forego by continuing to rent your apartment for another year and that subtracts another $3,600-$8,400 from your "savings".

So now you're making a big deal about a savings of $1,500-$6,500 that is contingent upon the event of interest rates dropping a half point in the next year.


Now in your worst case scenario by waiting you would lose $17,000 (which would also need to be adjusted for inflation, so the real loss would be more like $13,000).

You would also still have to tack on the $3,600-$8,400 (depending on how much you currently pay in rent) which puts us in the $16,500-$21,500 range of what you will "lose".


I realize this is a simplified model and there are some other factors to consider, but it should demonstrate that its really not worth giving the interest rate a ton of consideration when you're buying a house unless you somehow had very dependable information about which way the rates would be moving in the future...



[Edited on April 24, 2006 at 3:16 AM. Reason : a]

4/24/2006 3:12:56 AM

rates will go up once more in 2006 in may with the next fed funds hike

after that they will be stable for the next 12 months

then you'll see a slight dip for 6-9 months and another steay increase up to levels that are higher than they are now, but not by much

the yield curve is currently flat/negative and is going to stay that way for a while, it makes for an interesting mortgage rate situation

4/24/2006 7:20:27 AM

^^ A reduced amount of rent in an apartment for another year is not a "savings"... If anything its lost money because you aren't building any equity. Not to mention that $15,000 more you are paying in interest would turn into about $30,000 if placed in a simple investment, like an ING savings account at 4%, instead of losing it to a higher mortgage lending rate. Of course we are doing this with just a $130,000 home and there aren't all that many homes for that price in Raleigh. BUt he is right on one thing... don't buy based on the rate trends. It is IMPOSSIBLE to predict what is going to be done and finding a great deal on a house that is what you want will pay off far more than trying to guess with a few percentage points (especially since odds are the rate is going up, overall).

4/24/2006 9:14:31 AM

joerrad is the dumbest n word to ever use this site

he's been supplyin the dumb for half a decade now

4/24/2006 10:19:33 AM

^^if you're paying off a loan of 130,000, and you put a down payment of 10-20%...that'd be a house in the neighborhood of 145k - 165k and you can definitely find many houses in that range in the raleigh area. so his figures aren't far off. however, your other points are accurate.

[Edited on April 24, 2006 at 11:03 AM. Reason : ]

4/24/2006 11:02:38 AM

Yeah, I was simply figuring that most people out of college are going to be financing 100%.

4/24/2006 11:41:10 AM

Quote :

"A reduced amount of rent in an apartment for another year is not a "savings"... If anything its lost money because you aren't building any equity."

Um yeah I know. This is why I subtracted it from the "savings". I think you misunderstood...


And yeah i was factoring in a ~20% down payment...

I think waiting until you can make a down payment is more important than waiting on interest rates that may or may not work to your advantage...

[Edited on April 24, 2006 at 12:35 PM. Reason : a]

4/24/2006 12:27:50 PM

Look for them to rise for another quarter or two, then it should level off.

4/24/2006 12:31:47 PM

hopefully the minor dip later this year will coincide with a slight drop/stabilizing in home prices in this area. home prices have already begun to stabilize in many places. this area lags the national trend, and also avoids the major swings other places see. if there's some cooling off in the 3rd quarter, and I get 6.5% or lower on my primary home, i'll be content.

4/24/2006 12:36:28 PM

if you're renting, buy now no matter the rate, unless you're buying in the ghetto

4/24/2006 12:46:10 PM

I am looking now and there should be some action now that we are coming into the real estate season but I am not finding many houses that I like yet. :-\

4/24/2006 1:38:57 PM

Quote :

" Um yeah I know. This is why I subtracted it from the "savings". I think you misunderstood... And yeah i was factoring in a ~20% down payment... I think waiting until you can make a down payment is more important than waiting on interest rates that may or may not work to your advantage..."

I shoud know better than to post before having coffee. I believe I got everything backwards.

4/24/2006 1:52:53 PM

Quote :

"If you are consulting TWW for serious personal or business financial decisions you are considerably fucked. "

perhaps, B. perhaps. i've gotten some pretty good advise from some of these fucknuts (no homo).

4/24/2006 2:13:20 PM

Personally I dont think consulting TWW is a bad source of information anyway.


When you contact professionals they may know more about it than people on here but they aren't impartial information givers.


Anyone who seeks to gain financially from you, often isn't acting in your best interest.


I think collecting information from informed recent college graduates & students who arent attempting to profit off of you is a good idea actually.

[Edited on April 24, 2006 at 3:07 PM. Reason : a]

4/24/2006 3:07:29 PM

gimme your money

4/24/2006 4:09:02 PM

Quote :

"Look at how little this will actually affect your loan..."

In most mortgages youre going to pay more in interest than the principal ammount you borrowed.

That said, I have several loan sheets from mortgage companies in my email. I havent received the new quarters' rates, but I'll be happy to email what Ive got to you as a beginning. Mortgage companies should be more than happy to provide you with this information though. It is what theyre in the business of, after all

4/24/2006 4:19:03 PM

^ Well yeah...


The questions wasn't

Quote :

" Does interest suck to pay? "

The question was

Quote :

" Will the rates be going up or down in the upcoming months? "

And my simple answer was that there's really no way to know for sure which way it will move and its fluctuations really won't significantly affect how much money you save.

This isn't one of those things where you buy a big screen TV one week and then see it marked down 30% the next.

4/24/2006 4:57:41 PM

i have a question for the tww financial advisers. i'm graduating in 2 weeks and have a pretty nice sum of money saved up + graduation money. i have a pretty good paying EE job offer on the table that would start june 1. my current lease ends july 31.

i understand that if i rent for another 9 months-year, it'll be money that i'm throwing away and never getting back. but i wanted to hear what people's experiences and opinions were. whether it'd be better to buy 2 months out of college, or wait another year...or longer than that.

also. i'm thinking about buying a house in trailwood hills, living there for maybe 5 years and then turning it into a rental property. thoughts?

4/25/2006 5:36:45 PM

^very good idea. not saying that you WONT be able to get the loan, but, brokers really look at your current employer and how long you have been with them.

being that you are just starting, and depending on your down payment, you will probably have to pay PMI until you get the 20% equity.

but, renting your place is a great idea, so long as you are careful about whom you are renting to.

4/25/2006 5:45:28 PM

Unless you can get 20% down, I'd say rent until then.

There's nothing more irritating than paying that gay PMI. You'd be better off borrowing from your folks or something to come up w/ the 20% off & just pay them back slowly (and hopefully, without interest if they're kind folks). This way you get your place, avoid PMI, start building home equity, avoid throwing money in a hole (renting), and don't have to move twice in a year.

4/25/2006 5:49:33 PM

i would definately rent a year out of college. make sure the job is secure.

also, it gives you time to search out options. however, if youre sure you are going to stay in raleigh for 5+ years, it wouldnt be a horrible idea to buy a place.

4/25/2006 6:00:17 PM

MI is better than renting

to clarify: don't buy just any house just to buy something, but if you have a house in mind and want to buy go ahead

[Edited on April 25, 2006 at 6:02 PM. Reason : .]

4/25/2006 6:00:56 PM

thanks guys. anyone else with thoughts?

4/25/2006 10:17:11 PM

Look in to a Adjustable Rate Mortgage: ARM

4/25/2006 10:29:30 PM

You can get the 20% in a second mortgage without having to pay any PMI... heck often the difference in PMI and no PMI loans is negligible so just sit down with a lending agent and see what they work out in the numbers. DNJ Mortgage had pretty good numbers when I talked to them. NewStar is who I went with though... no one could touch the deal they set up for me. Not many people can save up $30,000 in a year so paying rent and trying to save is not likely to be as efficient as simply getting a second mortgage.

Seriously, just go sit down with a lending agent. They will gladly run numbers for you and figure out what is in your best interest.

4/25/2006 11:09:38 PM

Quote :

"what is in your best interest."

I see what you did there

4/25/2006 11:12:03 PM

yeah that made me LOL too

besides, being wrong as well

[Edited on April 25, 2006 at 11:13 PM. Reason : .]

4/25/2006 11:13:26 PM

YA WHATEVER YOU DO, DONT GET A GAY FUCKING ARM LOAN WITH A FUCKING 5 OR 10 YEAR BALLOON.

ADN A SECOND MORTGAGE IS STUPID IF YOU ARE PAYING 14% INTEREST.

Talk with people who can loan you the money. A 30 yr. fixed FHA is THE way to go. And, it only requires 3% down.

4/25/2006 11:27:21 PM

Quote :

"YA WHATEVER YOU DO, DONT GET A GAY FUCKING ARM LOAN WITH A FUCKING 5 OR 10 YEAR BALLOON. ADN A SECOND MORTGAGE IS STUPID IF YOU ARE PAYING 14% INTEREST. Talk with people who can loan you the money. A 30 yr. fixed FHA is THE way to go. And, it only requires 3% down."

You can get a second mortgage fixed between 6 and 8%. Plus, nothing stops you from paying ahead on the second mortgage. Watch out for Inerest Only loans too... a lot of lenders try to push those through because its lower payment is attractive but you can easily fuck yourself over with one (if you pay the proper amount on the principal every month, using an amortization table or soemthing, then you have nothing to worry about).

4/26/2006 12:26:15 AM