Just got out of the ARM trap

[Lamini]

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[wkndbeacher]

Rates depend on where you re getting the money from, if the fed is lowering the interest rate then it would be good business for that particular banking institution to follow seeing as their charged less so why not pass the savings onto the consumer.

 

[Mikeinsmd]

heres what I heard at work. When the feds lower the rates, it has nothing to do with the mortgage interest rates, or has very little to do with it. that rate has to do with a 10 year bond. ie, the 10year bond rate is identical to mortgage interest rate (?), (this is what i was told). what that suggests is by lowering the national rate, it makes the bond stronger which increases the mortgage rates.

maybe someone in this type of business can make this clear

So what these water cooler experts were saying is that an ARM only goes up? Never down?

I'm curious where you work and what these ppl. do.

 

[crabcake]

So what these water cooler experts were saying is that an ARM only goes up? Never down?

I'm curious where you work and what these ppl. do.

:dingdoyouwantanapplepieding:

 

[JEB]

A few months later I even paid down the interest for several thousand dollars.

This is what got my attention. I pay down my principle.

 

[refi-rep]

Rates depend on where you re getting the money from, if the fed is lowering the interest rate then it would be good business for that particular banking institution to follow seeing as their charged less so why not pass the savings onto the consumer.

Make sure they arent charging anything on the backend with that as well when you refi.

 

[czygvtwkr]

The only thing that mortgage rates are tied directly to are 30 year bond rates, but the Fed doesn't issue 30 year bonds very often so the 10 year bond rate is somewhat used.

 

[refi-rep]

The only thing that mortgage rates are tied directly to are 30 year bond rates, but the Fed doesn't issue 30 year bonds very often so the 10 year bond rate is somewhat used.

Yup. Mortgage rates vary from company to company, I ve seen rates for a 720 score vary a point to a point and a half from company to company.

 

[Lamini]

Yup. Mortgage rates vary from company to company, I ve seen rates for a 720 score vary a point to a point and a half from company to company.

what do you think? his plan sound ok? let me know:

I am writing you to go over the specifics of the loan I have qualified you for.

The new mortgage is a 30-year fixed loan including your taxes and insurances and the new payment is going to be $2,018
This payment not only includes your taxes and insurances but also includes about $280 in principal to pay off the mortgage.
The interest rate on the mortgage is 6.25%

I am setting closing up for Feb 15th so we will skip you March payment and your first payment will be due on April 1st.

If you were looking to buying the rate down on the loan you can do that for 1 point in discount the rate will go from 6.25% to 6.00% which will drop the payment by $46 to $1972.

I do not recommend doing a buy-down because it will take many months of saving $46 to make up for the point paid at closing. I would rather help you focus on increase your credit scores and then do a streamline refinance to lower the mortgage payment with your higher credit score down the road.

 

[Mikeinsmd]

what do you think? his plan sound ok? let me know:

I am writing you to go over the specifics of the loan I have qualified you for.

The new mortgage is a 30-year fixed loan including your taxes and insurances and the new payment is going to be $2,018
This payment not only includes your taxes and insurances but also includes about $280 in principal to pay off the mortgage.
The interest rate on the mortgage is 6.25%

I am setting closing up for Feb 15th so we will skip you March payment and your first payment will be due on April 1st.

If you were looking to buying the rate down on the loan you can do that for 1 point in discount the rate will go from 6.25% to 6.00% which will drop the payment by $46 to $1972.

I do not recommend doing a buy-down because it will take many months of saving $46 to make up for the point paid at closing. I would rather help you focus on increase your credit scores and then do a streamline refinance to lower the mortgage payment with your higher credit score down the road.

Not being nosey but is this on $300K?

 

[refi-rep]

what do you think? his plan sound ok? let me know:

I am writing you to go over the specifics of the loan I have qualified you for.

The new mortgage is a 30-year fixed loan including your taxes and insurances and the new payment is going to be $2,018
This payment not only includes your taxes and insurances but also includes about $280 in principal to pay off the mortgage.
The interest rate on the mortgage is 6.25%

I am setting closing up for Feb 15th so we will skip you March payment and your first payment will be due on April 1st.

If you were looking to buying the rate down on the loan you can do that for 1 point in discount the rate will go from 6.25% to 6.00% which will drop the payment by $46 to $1972.

I do not recommend doing a buy-down because it will take many months of saving $46 to make up for the point paid at closing. I would rather help you focus on increase your credit scores and then do a streamline refinance to lower the mortgage payment with your higher credit score down the road.

You need to private message me for I see somethings I dont like.

 

[refi-rep]

Not being nosey but is this on $300K?

I think you probably see one of the issues huh?

 

[Mikeinsmd]

I think you probably see one of the issues huh?

Well I'm not a loan expert. There are still many unknows. If this loan is for $300K or more, it's prolly close to accurate. If it's for less, than I say run for the hills.

Here's a quick amortization I did...

Principal $300000 Interest Rate 6.25%
Nmbr Pmt Prin Paid Int Pd Tot Prin Tot Int Tot Pd Prin Remain
1 1848.96 286.46 1562.55 286.46 1562.55 1848.96 299713.64
2 1848.96 287.95 1561.05 574.36 3123.55 3697.87 299425.73
3 1848.96 289.45 1559.55 863.76 4683.06 5546.78 299136.33
4 1848.96 290.95 1558.05 1154.67 6241.06 7395.69 298845.42
5 1848.96 292.47 1556.53 1447.09 7797.55 9244.6 298553.00
6 1848.96 293.99 1555.01 1741.04 9352.51 11093.51 298259.05
7 1848.96 295.52 1553.48 2036.51 10905.95 12942.42 297963.58
8 1848.96 297.06 1551.94 2333.53 12457.84 14791.33 297666.56
9 1848.96 298.61 1550.39 2632.09 14008.19 16640.24 297368.00
10 1848.96 300.16 1548.84 2932.21 15556.98 18489.15 297067.88

 

[refi-rep]

Well I'm not a loan expert. There are still many unknows. If this loan is for $300K or more, it's prolly close to accurate. If it's for less, than I say run for the hills.

Here's a quick amortization I did...

Principal $300000 Interest Rate 6.25%
Nmbr Pmt Prin Paid Int Pd Tot Prin Tot Int Tot Pd Prin Remain
1 1848.96 286.46 1562.55 286.46 1562.55 1848.96 299713.64
2 1848.96 287.95 1561.05 574.36 3123.55 3697.87 299425.73
3 1848.96 289.45 1559.55 863.76 4683.06 5546.78 299136.33
4 1848.96 290.95 1558.05 1154.67 6241.06 7395.69 298845.42
5 1848.96 292.47 1556.53 1447.09 7797.55 9244.6 298553.00
6 1848.96 293.99 1555.01 1741.04 9352.51 11093.51 298259.05
7 1848.96 295.52 1553.48 2036.51 10905.95 12942.42 297963.58
8 1848.96 297.06 1551.94 2333.53 12457.84 14791.33 297666.56
9 1848.96 298.61 1550.39 2632.09 14008.19 16640.24 297368.00
10 1848.96 300.16 1548.84 2932.21 15556.98 18489.15 297067.88

Yr numbers are pretty accurate, it says in the email 280k so unless you re agreeing to pay 20k in closing or getting cash(or a hidden ysp) run ...as fast as you can.

However for some strange reason, I still think this is someone trying to promote themselves

 

[somdrenter]

the math doesn't seem right here. Even in the sub-prime mess---there was a cap to how much the mortgage could adjust up the first year. Even if you adjusted up 3 points--your loan would have had to have been over 485k to go up 1400 dollars.

With a 700 credit score---why would you have been in such a nasty arm?

If you just got out the the crazy loan--and are just happy to share the news---good for you. Maybe keep the job a bit longer and take that 1400 a month and pay down your debt and restock your ESF.

If you are trying to get PMs to get business or referrals---and the story isn't quite "true"....shame on you.

Couple of things here crpc.

Many ARMs are tied to the LIBOR. A few months ago, the LIBOR was up around 5%. I’ve seen many ARM terms at LIBOR +5. So, the rate could go up to 10% or more.

Sub-prime can be a misnomer. A person could be a “prime” borrower and get a sub-prime loan. Usually the “worse” a loan is, the greater the commission or YSP (Yield spread premium) for the mortgage broker.

 

[refi-rep]

Yup. Thats why I was concerned with the 20k missing, thats a heck of alot and dont wanna see anyone taken through the ringer like that.

 

[somdrenter]

You see, I locked into a FIXED rate for 15 yrs in 98 because I'm smart like that.

Great for you Mike. However, in 1998, the average sold price for a home was $152,220. In 2006, average home prices were over 3.8x average family income

 

[somdrenter]

I was just thinking the same thing!! When the fed lowers rates, the ARM's rate decreases.

Unless the rate is tied to the LIBOR or bond market. The LIBOR and bond markets are not necessarily tied to the Fed rate. They may mirror, but one could be at a disconnect from the other.

 

[somdrenter]

heres what I heard at work. When the feds lower the rates, it has nothing to do with the mortgage interest rates, or has very little to do with it. that rate has to do with a 10 year bond. ie, the 10year bond rate is identical to mortgage interest rate (?), (this is what i was told). what that suggests is by lowering the national rate, it makes the bond stronger which increases the mortgage rates.

maybe someone in this type of business can make this clear

I love the experts

It depends on what the ARMs interest rate is tied to. LIBOR, Bond, other??

 

[somdrenter]

However for some strange reason, I still think this is someone trying to promote themselves

Yea REFI-REP. That is a possibility.