Rates, Rates, All Mortgage Rates are hiked

Even though I was fond of getting fixed mortgages, on one occasion, I failed (short sighted the issues) and for an 7 year ARM at 3.25%.

However, when I try to fix the issue by refinancing with 30 year fixed, I am getting an rate at 4.75% and with 60% LTV. If it is above 60% LTV, rate may be up further. This is for investment property.

The loan is appx 636k. If next 10 -15 years rates are at high level, I may need to absorb 12k/year after 5-6 years. Now, I have rent break even, but not later after 5-6 years ( as I do not see 12k/12 months = $1000 rent increase).

Here is the message from wells fargo contact

How many are you stuck like this? What will you do with such case?

why not keep the 3.25% 7 year ARM? How many years left?

Six years left. Yes, I am keeping as I have no choice to refinance !

You can save $10k interest per year for another 6 years. That’s a positive.

What was the fixed rate you could get when you got ARM? I think the best you could get was still above 4%.

At that time, it was 3.5% primary home and 4% investment home ! Now, it is 4.75% for investment as primary is 4.25%.

I’ve an ARM starting to float around 4%, will look to lock a good fixed rate. You have 6 years to wait, no need to worry. I’m not really worried, but apparently have missed the bottom rate.

Mortgage rate should have a dip after such dramatic rise. Brexit can happen faster, a few other countries could vote to leave EU, we have the whole word to look for the black swan.

The biggest black swan could be China. If China has big trouble, rate will be low

If above issues happen, it will impact our economy slightly or considerably some extend, but will not affect our country like the way we had in 2008-2011.

This is what every one telling (guessing), but may unlikely come back.

Now, Short sale is history and I really do not think that we will get back short sale in next 10 to 20 years. Same way, mass foreclosure is a history even though regular foreclosure is there.

With Trump and Rep, and strong FED, rates are unlikely to go back in next 4 years.

Our economy is business economy, and Trump+Rep are pro-business, reduce regulation, reduce tax supporters. If US reduces corporate tax to 15%, worldwide investors will be pouring money to US to take benefit ( USA becomes tax haven state! ). Economy is likely to go full swing and rates will go upside mostly.

Anyway, I am holding one Risky ARM ( My blunder ! ) and still can enjoy another six years, let me see how it works !

Come on Pros, when you had a chance to lock in a rate like this, you LOCK IT BABY and move on!!! Did you think rates would stay that low forever???

NOOOOOOOO. I knew it 100% locked all other homes with fixed except one ! That is why I said it is my blunder mistake, knowingly fell into the short term pitfall ! I took that route, based on mortgage person suggestion, to close the purchase deal faster.

Come on @Jil, you of all posters do not err…ever!!!

I jumped at a 30 year, 3.5% rate when I bought my current house in 2012. Even though I was planning to retire within a couple of years.

For my entire adult life, I had sided with those financial advisors who said to head into retirement with no house payment.

Now, I will retire with that mortgage active. I’m glad that was the path I chose. I’d lived long enough to have seen 12% mortgage rates - I had one of those in 1982 - and almost hyperinflation. It’s amazing what life experience does to one’s thinking.

The final deciding factor for me was, spouse’s SS - to start soon - would more than cover the payment. Everything else is just gravy. And, investing the cash instead of going mortgage free has paid dividends well beyond 3.5% interest cost.

1 Like

That’s good. There was debate about them increasing the forecast to 4 next year. This means we should have another good bull market year in 2018. No downturn until 2019.