Ok bloggers I am curious and need your advice on the interest rate situation with NVR. When we first signed our contract way back at the end of Feb. our interest rate at the time was 5.125% we were at a floating rate. We are not paying any points. We started asking for quotes the past week and for a week and a half the interest rate was at 5% exactly today it is at 4.875 with the way the market is going I am worried that it will go back up and not be below 5% so I wanted to grab the rate and lock it right away. However my hubby wants to see if the rate will drop. Today is Friday and with NVR we can only lock our interest rates Monday through Friday. I know its a gamble and thought it would be fun to read your opinions. The cut off today would be at 4pm so lets see what the audience say. :) Hubby is also interested in your thoughts. Should we grab it since it is the first day for us that it has dropped below 5% and originally our rate was 5.125 or should we take a gamble and see if it will drop down some more?
Thoughts anyone?
I would take the 4.875 but I am not a gambler! Lol!
ReplyDeleteI would lock at 4.875, but it just depends on whether you want to gamble or not.
ReplyDeleteJim says if it's a 30 year rate, that's a good rate! He said 15 year has been floating around 4% <3
ReplyDeleteThe 4.875% is a fantastic rate. I would lock it if I was you. How much more might it drop and how much of an impact would that make on your monthly payment.
ReplyDeleteIt depends on when you will be closing, however, I would highly recommend locking. 4.875% is at a near YTD low. The following news feed updates daily and is a great source of information and guidance:
ReplyDeletehttp://www.mortgagenewsdaily.com/consumer_rates/
Also, watching 10Y Treasurey and the stock ticker MBB (istock barclays Mortgage backed securities) is another guage of interest rates. Just remember as bond prices increase interest rates or the associated closing costs with the rate we begin to decline. It takes a lot more momentum for a positive change than it does for a negative change (higher costs/rate).
Also be cognizant of the news as any news but specifically around housing prices, employment, and Fed Meetings has a direct and indirect effect on mortgage rates. (News affecting the stock market can increase chances to a flight to safety in the bond market causing a rally in prices).
In short, pending when you are closing I would consider these questions:
1. WHAT DO YOU NEED? Rates might not rally as much as you want/need.
2. WHEN DO YOU NEED IT BY? Rates might not rally as fast as you want/need.
3. HOW DO YOU HANDLE STRESS? Are you ready to make tough decisions?
Follow your gut feeling, its usually right in these cases. My personal guidance would be if you are not going to have to pay points to lock and the lock length will get you to closing, locking isn't nec. a bad thing. :D
I hope this helps and best of luck to you!
Thanks everyone! We went ahead and locked the interest rate! We know if we waited longer it is possible that the rates may drop but then again it may not. I rather play it safe and below 5% is a good thing coming from 5.125%.
ReplyDeleteSo we did it. We are locked at 4.875%. Thanks everyone for your help.
As I said in another post....4.875% is wayyyy better then dealing with 13.5% (the rate we were lucky to get for our first house).
ReplyDeleteWay to go! I doubt you'll regret it.
ReplyDeleteGlad you locked in Stephanie! That is a great rate! We locked in at 4.75 and also had the same fears. We just kept things in perspective and locked in because like BD said, at least it's not super high like it used to be for many people a while ago!
ReplyDelete