interest rates

leennpJune 25, 2013

Hello all. I have been lurking for a while but finally decided to post just a small vent that I thought most of you would understand. Why the very week we finally find a house and are under contract does it have to be the week the interest rates have jumped way up. When we started this whole process, a few months and several offers ago, the rate was 3.4, today I get quotes of 4.75 or higher on 30 year conventional. Really!! At least this house is 150K less than the first offer we put in, so in the end will be fine, but just one of those frustrations.

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terriks

Murphy's Law?

    Bookmark   June 25, 2013 at 11:12PM
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kirkhall

Are Good Faith Estimates no longer available? It used to be you could get a rate lock for (90) some number of days with a GFE...

    Bookmark   June 26, 2013 at 1:07AM
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chispa

I'm not that old and I still remember when my parents had an 18% rate. It really could be worse!

    Bookmark   June 26, 2013 at 1:10AM
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mojomom

chispa, I was thinking the same thing. In the early/mid eighties when we were borrowing to buy our first home and building my husband's office rates were almost that high and although we didn't have any funds to invest, CD rates were 10+. Now that we are on the other end, not borrowing and cash heavy, interest rates are low and we're barely getting 1% on our cash. Murphy's law, take 2.

    Bookmark   June 26, 2013 at 1:50AM
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tkln

We are locked in at 4% but what's frustrating is that we were in negotiations for almost two months with the sellers before we signed a contract; if we had settled on a price only a week earlier we would've been at least .5% less.

That being said, my dad was a REA, and after he passed away, we were going through his things and found a mortgage handbook that had rates way up in the 20% area...so yeah, definitely could be a lot worse!

    Bookmark   June 26, 2013 at 4:50PM
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azmom

Anyone remembers "assumable mortgage"?

When we purchased our first house in early 80s, the interest rate was 19-20%. Our realtor found a house with an assumable mortgage, negotiated with bank and brought down the rate to 12%. The realtor was viewed as "can walk on the water". It was predicted that we would never ever see rate drops below 8% in our life time.....

    Bookmark   June 26, 2013 at 6:33PM
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leennp

Yes, it must be murphy's law. I told my husband after we booked a nonrefundable vacation after not finding house for several months, that we would find a house, and here we are a week later under contract. Well the upside i guess is that we get to have a nice vacation before the craziness of remodeling the new house starts because there won't be another one for a while. And interest rate is not that bad, just really surprising how fast they went up

    Bookmark   June 26, 2013 at 8:41PM
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pamghatten

And assumable mortgages are still around, these days most of them require the new borrower to be qualified for the mortgage they are to assume ... they haven't been attractive for many years since rates were declning .. they will be much more attractive as rates go up and sellers have low interest rate loans.

You can always ask if that's an option.

    Bookmark   June 27, 2013 at 12:26PM
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violetwest

and home prices are also going up.

I bought 6 months ago -- glad I did!

But keep in mind when you see those historical 18% interest rates -- you could buy a house back then for what you'd pay for a car now

    Bookmark   June 27, 2013 at 12:30PM
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sapphire6917

There are still some places in the country where you can buy a house for the price of a car...or less. This is my first house and it was approximately $18/sq. ft. It was move in ready and in a good, transitional area in the city. Many city homes here cost less than $70K.

My interest rate is 5.5% and when the rates started to get down into the 4% and even 3% range, I started to feel a little antsy but, at the end of the day, my mortgage is still more than a hundred dollars less than my rent was every month so it was hard to feel bad about it.

    Bookmark   June 27, 2013 at 3:29PM
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oklahomarose

Sapphire69...+1! It is nice to live in a part of the country where a single person on a decent salary can buy a nice place to live.

    Bookmark   June 28, 2013 at 1:29PM
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chispa

I can't even imagine prices like that, having always lived in major metropolitan areas on both coasts. Prices have risen in my town and a move in ready house is now in the $600/ sq.ft range. Beyond crazy!

    Bookmark   June 28, 2013 at 3:25PM
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sapphire6917

I couldn't imagine prices like $600/sq. ft!!! I live in a mid-sized city and home prices have never been anywhere near that and I doubt I'll see those kind of prices in my lifetime. The cold weather kind of scares people away from here but the summers are green and gorgeous. Even if I had moved to another city to live, with these prices, I would have still bought a summer home here.

As I look at the prices in California and some of the large cities here in the East, I love my house that much more!

    Bookmark   June 28, 2013 at 7:22PM
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chispa

Yeah, I would too! Even prices in CA can vary quite a bit, but you will pay up to get top schools and a short commute.

    Bookmark   June 28, 2013 at 8:23PM
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