4.25% 30 year mortgage rates

**erikbj** · 12-06-2008, 12:22 PM

I was reading an article from a research service I subscribe to and they said interest rates will be at 4.25 to 4.5% in the next 3 months. If that does happen, look for this economy to turn around fast.

This would cause a bounce in home prices and people could refinance their mortgages = more discretionary spending

Pending the insurance companies don't go under in the next couple months, this recession could be very short lived.

**Bobber** · 12-06-2008, 12:39 PM

Originally Posted by erikbj

I was reading an article from a research service I subscribe to and they said interest rates will be at 4.25 to 4.5% in the next 3 months. If that does happen, look for this economy to turn around fast.

This would cause a bounce in home prices and people could refinance their mortgages = more discretionary spending

Pending the insurance companies don't go under in the next couple months, this recession could be very short lived.

I disagree. What's a better deal, a house that's worth $300,000 and financed at 4.25% or the same house at $150,000 at 7.25%?

For the people who over paid, 4.25% will help, but they're still stuck with too large of payments.

I think home values have to drop to levels that are more reflective of traditional salary to home ratios. For instance it used to be you could buy a home that was a multiple of 4 or 5 times your pay. Now in some areas it's like 10 to 15.

The Feds have really been trying to kick the economy in gear with lower rates, but that doesn't do anything for the underlying pricing issues.

**brianhos** · 12-06-2008, 12:43 PM

It is all a question if prices have hit the bottom. In Iowa, they only had a minor bubble, so this could be good for the local housing market. But on the left coast, it is still priced too high.

**brokenloginagain** · 12-06-2008, 12:52 PM

4.25%??? Sweet!

Now, all people need are jobs, savings, a down payment, and a decent credit score and we are on our way!

**DevilDog** · 12-06-2008, 01:04 PM

What is the current rate for a 30 year fixed right now? I'm currently at 5.875% but will refinance if it drops under 5%.

**brianhos** · 12-06-2008, 01:09 PM

Originally Posted by DevilDog

What is the current rate for a 30 year fixed right now? I'm currently at 5.875% but will refinance if it drops under 5%.

Sounds like these deals are going to be spronsored by freddie/fannie and only available for new purchases.

**stateofmind** · 12-06-2008, 01:20 PM

Originally Posted by brianhos

Sounds like these deals are going to be spronsored by freddie/fannie and only available for new purchases.

It will actually be for new loans, not necessarily on new homes. So if you refinance a new loan like we are, we will qualify. This according to my mortgage broker. I asked him after I read an article on CNN about the Feds' goal was to get new home loans down to 4.5%. It stated that refinancing wouldn't qualify. My broker said as long as you weren't working with the bank to negotiate your current loan, you would qualify. Currently I can lock in for 5% 30 year fixed. My current loan is 6.375% on an interest only loan. We paid $12000 + in interest this year on a $1032 payment with none going to principal. My new note would go to $1043 and would only pay $9000+ in interest and pay just shy of $3000 down in principal.

I am torn whether to wait to see if the rates get to 4.5% or to lock in at 5% and just be happy.

**brianhos** · 12-06-2008, 01:30 PM

Originally Posted by stateofmind

It will actually be for new loans, not necessarily on new homes. So if you refinance a new loan like we are, we will qualify. This according to my mortgage broker. I asked him after I read an article on CNN about the Feds' goal was to get new home loans down to 4.5%. It stated that refinancing wouldn't qualify. My broker said as long as you weren't working with the bank to negotiate your current loan, you would qualify. Currently I can lock in for 5% 30 year fixed. My current loan is 6.375% on an interest only loan. We paid $12000 + in interest this year on a $1032 payment with none going to principal. My new note would go to $1043 and would only pay $9000+ in interest and pay just shy of $3000 down in principal.

I am torn whether to wait to see if the rates get to 4.5% or to lock in at 5% and just be happy.

Holy crap, you paid $12k in interest? I would have to be on medication to cope with that. My ulcers would bleed so much that I would be hospitalized.

**drmwevr08** · 12-06-2008, 01:58 PM

If only I had the equity to get a 30yr conventional... Oh well, I may manage an FHA @ 5.5 or better here soon.

**Bobber** · 12-06-2008, 02:05 PM

Originally Posted by drmwevr08

If only I had the equity to get a 30yr conventional... Oh well, I may manage an FHA @ 5.5 or better here soon.

What are the requirements? Seems like when I got my first one you had to have 20% down to avoid mortage insurance, but I don't recall a lot of hoops other then that.

I think it's the type of loan that most people should get. Fixed payments and if you want to be agressive, you simply pay on your note early. That's what I've done.

**Cydkar** · 12-06-2008, 02:13 PM

I'm hoping to move next Spring. Hope it stays under 5.0. i'll be tickled. i'm at 5.1% and it's hard to swallow upsizing with a 6% rate.

**dmclone** · 12-06-2008, 04:49 PM

Originally Posted by Bobber

What are the requirements? Seems like when I got my first one you had to have 20% down to avoid mortage insurance, but I don't recall a lot of hoops other then that.

I think it's the type of loan that most people should get. Fixed payments and if you want to be agressive, you simply pay on your note early. That's what I've done.

You can usually get better rates on lower terms but even the 30 year rate is excellent right now.