Profile picture for nettech99

When will 30 year conventional fixed rates go back down under 5.00%?

Looking to refinance at under 5% rate
  • June 25 2009 - Austin
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Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

 
 

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Profile picture for blue screen exile
The "low" of the past 3 years still seems to be Thanksgiving weekend of 2009; with median Zillow quotes for 30 year fixed 680+ FICO 20% down of 4.5%.  We are at 4.9% median now, up slightly from yesterday's 4.89%.

It will be hovering around 5.0% for a while.  I don't expect to see it go below the rates for Thanksgiving weekend 2009 for at least a decade; unless of course congress steps in again for some unknown reason, such as still too many foreclosures to liquidate.

We should see 6% to 7% within 1 to 5 years; timing will substantially depend on what congress does, and what the FED does.

If I had to bet; let's just say 6% 3 years from now.
  • April 14 2010
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Profile picture for blue screen exile
"who actually did most of the loans for people, that were not suited for the people who received them" -

Well, you stated brokers did 75%, and direct lenders did 25%, and they both were just as careless at checking if the borrower would repay, therefore the broker obviously did "most" of them.  Definitely a "majority".  Clearly likely a super majority.

Yes, Contrywide was extremely lax on their credit checking and income checking, and asset value checking; but they also provided a lot of those loans at wholesale rates for the brokers to sell/write up.

And we now know that it was that company that was buying the very low end of the CDO's, and then betting that the middle would fail that pocketed most of the money for their customers and caused most of the financial institution collapse.
  • April 14 2010
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Profile picture for blue screen exile
You have a point there; and some lender funded every one of those loans too, since no broker has the ability to fund without a lender...

But the lender didn't get the appraisal, and the loan officer submitted something to the underwriter, according to what the the underwriter asked for and what the loan officer thought they could get away with...

I also easily undercut the rates of the mega-corporations in my industry due to experience and efficiency..., but I don't re-sell nor package products from any mega-corporation.  And many potential clients still think I'm too small to handle larger needs.  It is their own loss.
  • April 14 2010
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I hope the facts eventually shake out, on who actually did most of the loans for people, that were not suited for the people who received them.
My guess is that, Direct Lenders did at least half of them. Some Lender underwrote every dam one of the loans Brokers did.
  • April 14 2010
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Profile picture for blue screen exile
"Why did Brokers do 75+% of the business, during the boom? Because they were higher priced?"-

No, because the lenders were only staffed to handle about 25% of the business, and didn't want to staff up for what would obviously result in a decline of a boom in a short period of time.

And then you had all those dishonest brokers that just sold people anything, and tricked them with extra fees when it was too late for them to do anything else, and now most of those are waiting foreclosure as they also distorted what the people could afford, and got bogus appraisals so that the loans would be underwater.

You have 2 decades of experience that YOUR overhead plus the overhead and underwriter fees for the wholesale loans is less than SOME of the direct lenders; but that is because you know how to be efficient and keep your costs down.  It doesn't mean that is the case for "all" brokers" and "all" direct lenders, nor does it mean that all brokers will give what they offer.
  • April 14 2010
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I still believe it. I have over two decades of empirical evidence. It sure hasn't gotten any easier for Brokers, but it can still be done. Why did Brokers do 75+% of the business, during the boom? Because they were higher priced?
  • April 14 2010
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As a broker I receive their wholesale rates and can pass that savings along to my clients.

nice theory, do you find anyone that still believes that?
  • April 14 2010
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Profile picture for blue screen exile
Obviously, the 3 giants are not the only direct lenders, nor are they the only wholesalers.

And obviously, we are not talking about "total overhead", but "percentage overhead" as of course the larger you are, the larger your total overhead, but the larger you are, the more "economy of scale" should be in effect, and thus it should be smaller percent overhead.

Obviously, size and location of office makes a difference and volume of sales makes a difference.  Tax rates on rural offices are much lower than on downtown metropolitan offices.  And a 100 sq ft bedroom office in a 800 sqft paid off house should be much lower overhead than a 3000 sqft executive office for one person in a high rise.  But if you only write one loan in 30 days, the entire overhead must be covered by the one loan.

And if a company has multiple divisions that provide multiple services?  How do you divide up the overhead for each of the services or divisions?

Many businesses will subsidize the overhead for one service from the profits of another service, just as a "convenience" to the customer, or for advertisement marketing advantage.

And if the wholesale rates and underwriter fees don't cover the overhead for these mega-corporations, then who does pay the overhead?  They don't provide those lending services for free no matter what broker or loan officer wrote or sold the loan.
  • April 14 2010
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How about deleting his spam Ice not just posting your policy?
  • April 14 2010
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Profile picture for Mr. Bubble
My post about the Superbowl was a facetious attempt to point out that NOBODY can predict interest rates AT ALL. If you like today's rates, take them.
  • April 14 2010
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Profile picture for Ice L.
  • Ice L.Zillow
  • 14620 contributions
Hi Dahl and Don -

Please no spam or self-promotion please. Zillow's Advice is not for promoting your rates and suggesting users to contact you directly, it is meant for helpful advice.  

Thank you.
  • April 14 2010
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Yeah, I suspect Don Groff's overhead is right inline with Wells Fargo, Chase, and BSofA.

Wells Fargo's retail site is quoting 5.00%, today. Huh, somebody is sharing something with the customer.
  • April 14 2010
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Profile picture for blue screen exile
And the fees on his last 5.0% 30 year fixed were $1768, so he is not "giving" anything back to the borrower, but spending it on appraisals... and pocketing it.

  • April 14 2010
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Profile picture for blue screen exile
3 of the last 9 fixed rate quotes for more than 15 years that Don provided on Zillow were for 5.0% fixed.  That is 33% of his "recent" quotes are NOT below 5%.

  • April 14 2010
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Profile picture for blue screen exile
No one believes that propaganda about broker's + wholesaler's overhead being less than direct lenders...  Not when side by side quotes on Zillow indicate direct lenders are equally competitive.

The only reason the lenders offer wholesale rates is to increase loan sales without increasing staff.  The only reason brokers use wholesale rates is they have no money of their own to lend.
  • April 14 2010
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Don, you may want to check that rebate on a 75-80 ltv with a 720-739 score, you will be paying .250 out of your pocket 
  • April 14 2010
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So Don, are you saying you can do these rates/price on Condo's, Investment Properties, and 2-4 units?

30 year fixed, 720 fico, all LTV's up to 95%

4.75% pays a rebate to the client of 1/2% of the loan amount.
4.625% would cost .375% discount
  • April 14 2010
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Thanks for the spam Don. 
  • April 14 2010
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They currently are under 5%.  As of this posting my rates are as follows:

30 year fixed, 720 fico, all LTV's up to 95%

4.75% pays a rebate to the client of 1/2% of the loan amount.
4.625% would cost .375% discount

Retail banks charge more because of overhead expenses.  As a broker I receive their wholesale rates and can pass that savings along to my clients.
  • April 14 2010
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Ok then, back to Yankee Football. Way to go on your rate under 5%!
  • April 14 2010
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Profile picture for nettech99

Pasadenan has some useful information to share, the rest of you are all over the map with baseball topics.

If you are going to make sports references, stick to football only.   I can stipulate that, I started the question.

I did close by the way last year at the rate I wanted, under 5%.

  • April 14 2010
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Profile picture for shapiroamg
Dahl has a unique ability to raise dead threads from the grave. Perhaps she is a witch or something?
  • April 14 2010
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When the economy gets so bad, that no one can borrow money, or wants to, again.

My '025 Superbowl prediction, the Beijing Yankee Bankers expansion team.
  • April 14 2010
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Interest rates are easy to predict, they will do one of three things...

  • April 13 2010
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socal, it would be a snowballs chance in ... to have another BB score identical as mine, on the exact same day, that looks like 2 TD's/1 FG vs a safety.....

It's not over yet,
we could go 0-3 
  • April 13 2010
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Profile picture for Mr. Bubble
Hmm. I'd like to offer you sports guys a job predicting interest rates.
  • April 13 2010
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I will refer to Joshua as Joshuadamus from now on
  • April 13 2010
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@ Clay :: What a coincidence. My Padres happened to win a game by the same 17-2 score. Small world?

  • April 13 2010
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The New York Yankees were a short-lived professional football team from 1926 to 1928. Yankee Football

The 2010 Yankees BB team is looking like a force to be reckoned with.
 
  • April 13 2010
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LOL, my Braves lost 17-2 yesterday and it wasn't to the Yankees or Sox!
You are probably right on the Super Bowl.
  • April 13 2010
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