Comments on: Historical Mortgage Rates

By: Freebird

Freebird — Mon, 02 Aug 2010 17:20:53 +0000

Sure, rates are amazing. But you home buyers have all been lucky. First, most banks now require that you put 20% cash down. Not so easy for many. THEN, the banks seem to look for ANY excuse to reject your loan application, even if you’ve been “pre-qualified or pre-approved.” I urge all of you home buyers, regardless of your stellar credit ratings, to request VERY long closing dates in your contracts. You will not believe the rediculous hoops the banks will make you jump through to get your loan. Don’t get me wrong… they SHOULD be EXTRA careful before making these loans but their requests get completely stupid, and laughable. I will spare you the stories of our home purchase but it miraculously worked out in the end. Others may not be so lucky.

By: Funny about Money

Funny about Money — Sat, 31 Jul 2010 01:26:12 +0000

That’s incredible. If Donna’s bank will do that, I wonder if we could get our credit union to give us a near-miraculous rate. I would cheerfully pay a few thou up front to get rid of the obscene payments on a house that’s not worth what we owe on it.
Seconding BG: what bank, please?

By: BG

BG — Thu, 29 Jul 2010 20:25:58 +0000

Donna) That is nuts — what bank did you use? If I can get APRs that low, then it would be worth it to do a refi.

Did your APR calculation include the $5k in seller paid closing costs (it’s still a cost, just not yours)? Did you buy from a builder?

By: donna

donna — Thu, 29 Jul 2010 17:40:00 +0000

Thanks, BG… I’ve never thought of all the extra costs. We managed to get a hell of a deal, including a credit on appraisal, and $5000 in seller paid closing costs. So, because of PMI, it’s up to %3.5642APR.

By: BG

BG — Thu, 29 Jul 2010 17:28:13 +0000

Donna) I tend to just ignore the quoted ‘rate’ now, since closing costs are so much higher than years past. Calculate your own APR (which includes the costs, not just the interest) to see how a loan really stands. I don’t trust the APR quoted by lenders either, because they ignore a lot of the fees associated with the loan.

Here is an online calculator to calculate your true APR number:

http://www.efunda.com/formulae.....solver.cfm

A 3.375% rate sounds amazing, but what is the APR? That’s the important number to me. I’m sure I could go and get a 0% ‘rate’, as long as I paid $100k in fees/points to get there.

By: donna

donna — Thu, 29 Jul 2010 15:31:29 +0000

Just yesterday we locked into a 3.375% for a 30-year. Although it feels like that’s practically free, that’s still ~$5500 a year in cost to finance the home.

By: Nickel

Nickel — Thu, 29 Jul 2010 11:37:49 +0000

BG: Yes, I believe that is the initial rate for the ARMs – this is typically how they are presented, but obviously there is a huge asterisk that accompanies that rate. I’m not at all a fan of ARMs, especially not 1 year ARMs, which is why I didn’t even mention them in the article. The graph isn’t mine (see link at bottom of article) which is why they were included.

By: Noah

Noah — Thu, 29 Jul 2010 02:17:32 +0000

Awesome! We got a 30 yr @ 4.75% back in April this year.

By: kev

kev — Wed, 28 Jul 2010 18:11:29 +0000

Refinanced back in 2003 for 30 years at 4.875% fixed. Man… I thought I was the top dog. I was the only person I knew out of family, friends, and co-workers with a sub 5% fixed rate. I thought they would NEVER be that low again.

Here we are a few years later and seems like everyone has a rate that low or even lower. I refinanced a different home this past December for 15 years at 4.5% with almost no closing costs. Friends of mine are now getting loans from that same bank for 4.25%. It’s crazy… If rates happen to fall to 4% flat and my lender keeps the same low closing costs in place then I will be refinancing again.

By: BG

BG — Wed, 28 Jul 2010 18:07:27 +0000

Are you just showing the first year’s ‘teaser’ rate for the 1-year ARM?

As it stands in the graph, the 1-year ARM appears to always be the best option, which I highly doubt is accurate.