Morgage Rates are a f'ing rip off

[billyNOTnice]

You know i've just got to vent because i'm being ****ed, and i'm tired of it. You know interest rates have been the lowest they have been in years, and well i'm buying my first home. So initially i get a quote of 4.875% for an interest rate when i first get pre approval for my loan ap. well i call in yesterday after i get my contract signed, and the interest rate has skyrocketed to 5.875% and i told the dude on the phone that's ****ing bullshit and that i haven't been raped this bad since the last time i got gas. So i hung up and looked at other lenders to find a better rate, and well there wasn't anything better, so i called back today to just suck it up and bite the bullet, and what do i find out? the rate went up and it is now 6.0% so i was even more angry and just locked it in due to the totally uncalled for skyrocket of the interest rates, I was going to leave it open and pray it went down, but i figured **** it, i'll just lock it in.

[HidalgoGT]

Not on the same level but, it was like that when I was going to buy tires. I looked them up and they were 250 2days later when I went to purchase them 305. Ended up with a different set a lil more aggresive and a lil cheaper. Just like you said though everything is going up.

[SonofaBish]

I'm sorta in your situation... I'm buiding a home this year.... I have been waiting for all of the pieces to fall together (township, municipal, architect, etc) ... finally all of the pieces fell correctly yesterday and was heading to apply for the mortgage today.... rates have gone up like crazy in the last couple days... I wasn't able to go today because of another setback, but plan to go tomorrow.

The interest rates have been all over the place the last couple days because of optimism in the housing market. However, I think the drastic, quick rise is only going to hurt things. People such as you and I, looking to buy/build a home right now, are going to turn around an say "nevermind." My projected payment has gone up $50 a month from Monday. Its only going to end up turning away folks again, and the market is going to crash again.

You'd think by now that the American economy would realize that the public doesn't respond well to sudden drastic changes...

My only hope is that in the 30-45 days before I close that the rates go down. When you lock in at a rate, that means you won't get a rate any higher than the one you lock in. If rates are lower the day of your closing, you will get the lower rate.

Good luck man - its been a frustrating road for me - sometimes wish i would have just bought a home instead of building.

[no1fordgirl]

hope it works out for you guys

[yeahloh95]

i'm in the same situation i was soo pist to find out the rates went up like that and i haven't even broke ground yet ,all because i'm trying to get the 8k tax break for being a first time home buyer

[SonofaBish]

i'm in the same situation i was soo pist to find out the rates went up like that and i haven't even broke ground yet ,all because i'm trying to get the 8k tax break for being a first time home buyer

I'm trying to do this too..
If you've finalized the loan, or even applied for the mortgage before now, you'll be ok though... you sound like maybe you've already done this..

I'm trying to get my place finished before December 1 as well... Looks like i need to be started by mid-july to do so... i hope it all works out - or else i'm going to be furious!

[PaxtonShelby]

Mortgage rates can be a crapshoot. They fluctuate more than you might think from week to week, and even day to day. We went to lock in our adjustable mortgage that was set at 3.625% for the last 5 years. The "new" rate was 4.875%. Anyway, we got busy with work and everything and didn't get locked in. Then, the next week when we did lock in, the rates had dropped to 4.5%. So that's the rate we get for the next 5 years. I have to admit I did a little happy dance when I heard that news...

Anyway, good luck with the home buying. It will all be worth it in the end.

[DING]

Interest rates change daily so you need to lock it in as soon as you can. Also DO NOT get as adjustable rate mortgage. Get a 30 years fixed, you can always do a re-fi when the interest rates get better.

[MarcInJapan]

Buying and selling a home is probably one of the most stressful events I have been through. Mounds and Mounds of paperwork. Then look 30 years down the road and see what you actually paid for the house.

[billyNOTnice]

i know... it makes me sick just doing all this... :(

[PaxtonShelby]

Adjustable rate mortgages are not always a bad thing. The problem is that, in many cases, people do not understand the stipulations of the loans. Plus there's all the bad press / media hype about these mortgages. We originally had a 5 year adjustable loan with an initial rate of 3.625% when we bought our house in 1996. So for the next 5 years our rate was fixed at that 3.625%. Now here's where the adjustable part comes in. After year 5, the loan could increase once per year for the next 3 years with a cap of a 2% increase per year. However, the historical data suggested that it is very rare for the increases to reach the maximum 2% increase. When our rate increased by approx 1.5% after year 5, we were able to pay a small fee of about $500 and lock in at a nice rate ( I can't remember - but it was well under 5% ) for the NEXT 5 years. The same thing happened after these 5 years, and for another $500 we locked in for the next 5 years at 4.5%. By the time these 5 years are over the house will almost be paid off, and we'll be WAY ahead of where we would have been had we stayed with a 30-year fixed rate loan.

So, my point is that, if you do your homework and get the RIGHT kind of adjustable rate loan, you can save a lot of money and have your house paid off much earlier than if you go with a 30-year fixed rate loan. I'm sure there are adjustable loans out there that can screw you, but that's why you have to do your homework. We went with Dollar Bank for our original loan and our refi's. Their rates were never the lowest out there, but the loan package is solid. And a nice thing about Dollar is that they always service their loans. Even if they sell your loan to another bank ( all banks do it - some folks have their loans sold 4 and 5 or more times ), your monthly payment always goes to them. So you don't end up having to mail your payment to Texas or California every month. You can just drive to your local branch and make the payment.

All that being said, right now there is a little more economic uncertainty out there than at the times we made our decision to go with an adjustable rate mortgage. Obama's crazy spending is priming us for some major inflation, and there are grumblings about how rates are going to jump over the next few years. So in that regard there are some concerns that the adjustable rate mortgages could cost you more than they otherwise would. You just need to run the amortization schedules and compare the 30-year fixed loan to the worst-case adjustable scenario and see where you end up. There's no doubt it can be stressful, but if you do your homework you'll be alright.

One last thing...don't buy a house that maxes you out financially. That's what gets so many people into trouble. If some problem arises ( lose your job, become injured and can't work, become ill, major repairs needed, whatever... ) they can't pay all their bills. Then they start leaning on their credit cards more and more. Pretty soon you're in a hole you can't climb out of and you're stressed beyond belief. Make sure you have emergency funds for 6-months of all your expenses ( including the mortgage ) and don't touch that money. You'll breathe a lot easier every month knowing you're in good financial shape.

Ok - that's all I have for now. Time to go outside and pull weeds so I can keep this money pit looking nice!!!

Best of luck to you in your house-hunting.