All Encompassing Mortgage and Real Estate Thread

[CooterBrown 18014]

My guess is that they’re all twice as far from civilization than they claim so the price isn’t out of line for their locations. At least that’s why I think they’re all pretty guarded about the actual address.

[tokamak 6431]

12 hours ago, CooterBrown said:

My guess is that they’re all twice as far from civilization than they claim so the price isn’t out of line for their locations. At least that’s why I think they’re all pretty guarded about the actual address.

“35 minutes from downtown!”

 

 

(If you are Max Verstappen and the zombie apocalypse has killed every other commuter on earth)

[Neonmoon 38129]

The market is currently pricing in the Labor Department's CPI data release on Thursday. 

This sucks

[UTPhil2006 3807]

3 minutes ago, Neonmoon said:

The market is currently pricing in the Labor Department's CPI data release on Thursday. 

This sucks

I've just come to expect that after any sort of reprieve, no matter how small, is another kick in the junk.  We locked everyone who would listen yesterday from the weekend for this exact scenario.

[Neonmoon 38129]

Looks like the yield is testing the 2 barrier today. Hope everyone locked yesterday. 

[Wulaw Horn 19073]

2 minutes ago, Neonmoon said:

Looks like the yield is testing the 2 barrier today. Hope everyone locked yesterday. 

Yeah- and no resistance all the way up to 2.12 I believe. 
so, awesome. And just like that the 3’s about to be gone from the 30 market. We hardly knew you 3’s. I was closing people in January in the 2’s and by April the closings will be in the 4’s. Maybe even March if you wait a week or 2 in order to get under contract. 
I don’t think the era of relatively cheap money is over. I don’t see anything pretty for our economy when they start raising the rates, consumer sentiment sucking, blah blah blah. 
many bet is we get a downward movement here starting in a couple months and get down to 3.5 ish at the end of the year. 
‘Tis sinks a guess though. 

[Neonmoon 38129]

40 minutes ago, Wulaw Horn said:

Yeah- and no resistance all the way up to 2.12 I believe. 
so, awesome. And just like that the 3’s about to be gone from the 30 market. We hardly knew you 3’s. I was closing people in January in the 2’s and by April the closings will be in the 4’s. Maybe even March if you wait a week or 2 in order to get under contract. 
I don’t think the era of relatively cheap money is over. I don’t see anything pretty for our economy when they start raising the rates, consumer sentiment sucking, blah blah blah. 
many bet is we get a downward movement here starting in a couple months and get down to 3.5 ish at the end of the year. 
‘Tis sinks a guess though. 

God I hope so

[Gatorubet 30242]

There definitely is a violation by the seller’s agent and if you have proof among the bidders that they lied about the offers you should report them to TREC. Unethical realtors tarnish the industry and should be called out. 

“Bad men need nothing more to compass their ends, than that good men should look on and do nothing.”

[UTPhil2006 3807]

1 hour ago, Neonmoon said:

Looks like the yield is testing the 2 barrier today. Hope everyone locked yesterday. 

Yep blew through it like cheap toilet paper.

That being said mid to upper 3's still very avaialble.  Even on 2nd homes.  

[MrBig 5404]

I drove to the 7-11 by Slaughter and Bluff Springs the other day. Holy shit. How many houses are they building out there? This doesn’t even look part of the Goodnight subdivision. There is so much empty field between Slaughter and Old Lockhart road. Looks like they are developing all of that land. I could see the plumbing hookups and all the lot lines. I’m thinking a few hundred lots? 

[Chewbacca 7780]

3 hours ago, Wulaw Horn said:

many bet is we get a downward movement here starting in a couple months and get down to 3.5 ish at the end of the year. 
‘Tis sinks a guess though. 

Not likely unless inflation settles the fuck down.  Rates have to go up right now.

[Wulaw Horn 19073]

2 minutes ago, Chewbacca said:

Not likely unless inflation settles the fuck down.  Rates have to go up right now.

My bet is it does. Starting next month (so April report based on March numbers) we will be comparing to times last year that were higher priced. I don’t think it keeps running like this, especially with 5 rate hikes on the way between now and middle of this year. 
like I said- it’s a bet, but it’s my bet. 

[Chewbacca 7780]

2 minutes ago, Wulaw Horn said:

My bet is it does. Starting next month (so April report based on March numbers) we will be comparing to times last year that were higher priced. I don’t think it keeps running like this, especially with 5 rate hikes on the way between now and middle of this year. 
like I said- it’s a bet, but it’s my bet. 

I hope you're right.  But I'm afraid you're not.  Printing trillions and trillions of dollars has to bite us at some point. 

[Neonmoon 38129]

1 hour ago, MrBig said:

I drove to the 7-11 by Slaughter and Bluff Springs the other day. Holy shit. How many houses are they building out there? This doesn’t even look part of the Goodnight subdivision. There is so much empty field between Slaughter and Old Lockhart road. Looks like they are developing all of that land. I could see the plumbing hookups and all the lot lines. I’m thinking a few hundred lots? 

There is a large shortage of homes right now. They can't build them fast enough. After the great recession, homebuilders declined by 50% from 2007-2012, but the population expanded by more than 20 million during the 2010s.

https://eyeonhousing.org/2020/01/a-decade-of-home-building-the-long-recovery-of-the-2010s/

We are in the finding out portion of this process. 

No Supply + Huge Demand = Skyrocketing Prices

(and every building throwing up homes as fast as possible)

[MrBig 5404]

20 minutes ago, Neonmoon said:

There is a large shortage of homes right now. They can't build them fast enough. After the great recession, homebuilders declined by 50% from 2007-2012, but the population expanded by more than 20 million during the 2010s.

https://eyeonhousing.org/2020/01/a-decade-of-home-building-the-long-recovery-of-the-2010s/

We are in the finding out portion of this process. 

No Supply + Huge Demand = Skyrocketing Prices

(and every building throwing up homes as fast as possible)

I still have an older house in that area closer to William Cannon and I-35. Should I sell with all the new builds in the area? Or should I wait since all thIs new development makes me look closer to downtown? It’s nuts right now! I thought I overpaid for my house but now I’m considering selling. 

[Dbeasy 15052]

The housing market is insane because of the low interest rates combined with the flood of money supply into the market. It’s causing asset inflation like we’ve never seen before. I just talked to a home builder and they are auctioning off modest lots for $500k and it’s a frenzy. Still. Something has to give soon. Hopefully the interest rate increases brings this under control. 

[jimmyjazz 45961]

22 minutes ago, Dbeasy said:

The housing market is insane because of the low interest rates combined with the flood of money supply into the market. It’s causing asset inflation like we’ve never seen before. I just talked to a home builder and they are auctioning off modest lots for $500k and it’s a frenzy. Still. Something has to give soon. Hopefully the interest rate increases brings this under control. 

I beg to differ.  I'll take the price inflation 7 days a week and just bend over on the property taxes.

[Wulaw Horn 19073]

51 minutes ago, Dbeasy said:

The housing market is insane because of the low interest rates combined with the flood of money supply into the market. It’s causing asset inflation like we’ve never seen before. I just talked to a home builder and they are auctioning off modest lots for $500k and it’s a frenzy. Still. Something has to give soon. Hopefully the interest rate increases brings this under control. 

So, I think we will see interest rates up a full point over the last 3 months maybe?  On a $500,000 loan that’s a $275.00 a month difference in payment. That’s certainly not nothing, but I don’t know that this puts the brakes on asset inflation. 
put another way, that interest rate difference is the difference of about 55 or 60k in house price. If I’m the seller before I lower my sales price 50k to get the buyer into the payment he needs I’d just as soon offer to pay $15,000 or so to buy his rate down to 3 or so. 
 

[KYHorn 17072]

15 hours ago, Wulaw Horn said:

So, I think we will see interest rates up a full point over the last 3 months maybe?  On a $500,000 loan that’s a $275.00 a month difference in payment. That’s certainly not nothing, but I don’t know that this puts the brakes on asset inflation. 
put another way, that interest rate difference is the difference of about 55 or 60k in house price. If I’m the seller before I lower my sales price 50k to get the buyer into the payment he needs I’d just as soon offer to pay $15,000 or so to buy his rate down to 3 or so. 
 

Great idea I hadn't considered. Is this somewhat common, and is it included as part of a formal offer?

Edited February 11, 2022 by KYHorn

[Wulaw Horn 19073]

59 minutes ago, KYHorn said:

Great idea I hadn't considered. Is this a somewhat common and included as part of a formal offer?

You can ask for closing cost contribution. Then you can spend that contribution on anything. 

[Wulaw Horn 19073]

At universal studios with the kids. When you ride the big time roller coasters they don’t let you bring your cell phones so you have to leave them in the locker.when I got in the line (and I have express pass so I skipped most of said line) we were up 33 bips for the day. When I got out of line after riding the roller coaster we were down 9 for the day (42 from when I left my phone). 
I like the universal roller coaster better than the mortgage backed security roller coaster. That goes up and down, MBS market seems to only go down nowadays. 

[UTPhil2006 3807]

Yep I just stopped opening that tab unless we get a new loan

[jimmyjazz 45961]

Back to the buying down the interest rate topic:  on that $500K loan, it would cost $20K to knock off a point of interest, right?  If a buyer is paying that cost, it can be rolled into the loan, can't it?  If so, it sure seems better to have a $520K loan at 3.4% ($2,306/mth) than a $500K loan at 4.4% ($2,504/mth).  What am I missing, and why have I never done this before?  I guess if LTV goes over the limit that could be a problem.

 

[Neonmoon 38129]

29 minutes ago, jimmyjazz said:

Back to the buying down the interest rate topic:  on that $500K loan, it would cost $20K to knock off a point of interest, right?  If a buyer is paying that cost, it can be rolled into the loan, can't it?  If so, it sure seems better to have a $520K loan at 3.4% ($2,306/mth) than a $500K loan at 4.4% ($2,504/mth).  What am I missing, and why have I never done this before?  I guess if LTV goes over the limit that could be a problem.

 

It costs 1% of the loan amount to buy a “point”. One point does not equal 1% interest rate. To buy down the rate from 4.4% to 3.4% would require a lot of points. 

A seller can pay concessions to the buyer. The amount depends upon loan program and LTV. Typically between 3% and 9% of the purchaser price. So, if the seller agrees to a 3% concession. The buyer can use that money to pay for closing costs or even buy down the interest rate. 

[jimmyjazz 45961]

3 minutes ago, Neonmoon said:

It costs 1% of the loan amount to buy a “point”. One point does not equal 1% interest rate. To buy down the rate from 4.4% to 3.4% would require a lot of points. 

A seller can pay concessions to the buyer. The amount depends upon loan program and LTV. Typically between 3% and 9% of the purchaser price. So, if the seller agrees to a 3% concession. The buyer can use that money to pay for closing costs or even buy down the interest rate. 

I didn't suggest a point was 1% of interest rate.  I thought it was 0.25% of interest rate, which would mean it would take 4 points ($20K) to knock off 1% rate.  Is this wrong?

[Wulaw Horn 19073]

33 minutes ago, jimmyjazz said:

I didn't suggest a point was 1% of interest rate.  I thought it was 0.25% of interest rate, which would mean it would take 4 points ($20K) to knock off 1% rate.  Is this wrong?

Generally right. 50 basis points equals 1/8 usually. There can be compression in the market which could work in your favor and a spread which could work against you,  but generally yeah that’s right. 

[Wulaw Horn 19073]

1 hour ago, jimmyjazz said:

Back to the buying down the interest rate topic:  on that $500K loan, it would cost $20K to knock off a point of interest, right?  If a buyer is paying that cost, it can be rolled into the loan, can't it?  If so, it sure seems better to have a $520K loan at 3.4% ($2,306/mth) than a $500K loan at 4.4% ($2,504/mth).  What am I missing, and why have I never done this before?  I guess if LTV goes over the limit that could be a problem.

 

You don’t want to pay your own money to buy down a rate bc if the market moves lower you could have gotten the same for free. That’s the short answer. You probably won’t be in your loan for 30 years (typical American is in their loan for 4.5 years as a frame of reference.) 

I generally tell people to run away if the points don’t pay out in 3 years. 

[Neonmoon 38129]

Save your cash. Invest half of it in low risk mutual funds and then take the other half over to my friend Asadulah who works in securities...

[LCHorn 2620]

4 hours ago, Wulaw Horn said:

You don’t want to pay your own money to buy down a rate bc if the market moves lower you could have gotten the same for free. That’s the short answer. You probably won’t be in your loan for 30 years (typical American is in their loan for 4.5 years as a frame of reference.) 

I generally tell people to run away if the points don’t pay out in 3 years. 

At least when I’ve done the math most point purchases have a 5-6 year break-even (sometimes longer, obviously).  That’s my benchmark to beat.  

[Wulaw Horn 19073]

33 minutes ago, LCHorn said:

At least when I’ve done the math most point purchases have a 5-6 year break-even (sometimes longer, obviously).  That’s my benchmark to beat.  

Agreed as where the benchmark usually is. I would call that par. That’s why, for me, 3 years is where I tell people they are getting value and should seriously consider. 
You know the stats. People just typically aren’t in their mortgages for that long and time value of money is a real thing. That’s why I’m so anti buying points as a general rule (typically I advise to do so in jumbo deals, investment property deals, and maybe places where you can really tell the person is going to be in their home forever and their interest rate is also really low. 
YMMV. Everyone’s deal is unique to them etc etc. 

I do almost always advise to haggle for closing cost and not price reduction. I mean, back when haggling was a thing and a buyer could offer figuring he would get the contract. 

[KYHorn 17072]

14 hours ago, Wulaw Horn said:

Agreed as where the benchmark usually is. I would call that par. That’s why, for me, 3 years is where I tell people they are getting value and should seriously consider. 
You know the stats. People just typically aren’t in their mortgages for that long and time value of money is a real thing. That’s why I’m so anti buying points as a general rule (typically I advise to do so in jumbo deals, investment property deals, and maybe places where you can really tell the person is going to be in their home forever and their interest rate is also really low. 
YMMV. Everyone’s deal is unique to them etc etc. 

I do almost always advise to haggle for closing cost and not price reduction. I mean, back when haggling was a thing and a buyer could offer figuring he would get the contract. 

So with regard to potentially lower rates in the future, would you advise buying down at these interest rates? We're pretty committed to this next house being very long term but I see your point about it being a loss if you buy it down only for rates to decrease.

[Neonmoon 38129]

Time value of money. Your cash will make more money in the market than the interest you will save in buying down the rate. 

[Wulaw Horn 19073]

2 hours ago, KYHorn said:

So with regard to potentially lower rates in the future, would you advise buying down at these interest rates? We're pretty committed to this next house being very long term but I see your point about it being a loss if you buy it down only for rates to decrease.

What Neon said. 
I would buy down the rate in 2 scenarios:

1) if I got the payback on it inside of 3 years (which @LCHorn pointed out is usually a 5 or 6 year type deal so 3 would be a real value; or

2) if I could get the seller to buy the points for me in exchange for that same amount in sales price. 
 

As this is a sellers market I doubt either of those two things happen for you, but if you got lucky on either of those two scenarios only then would I buy points. 

[Wulaw Horn 19073]

Honestly where rates are right now I’d probably be most likely to take a rate that’s 1/4 - 1/2 a point higher (depending on the loan amount) and have the lender pay my closing costs with the belief that sometime in the next 5 or 6 years I’d have the chance to refinance if rates get lower in the next 5-6 years (which I bet they do). 

[Wulaw Horn 19073]

So, yeah, I said next time I posted we might be up at 4 and we are up and way over that.  Also- this is from Friday- and today we are down another 52 basis points right now (another 1/8 of a point).  As always, this is the average of what's going on nationwide this particular day on my pricing software, it doesn't mean that this is the deal you'd get.  The Surly stud that has an 800 credit score and 40% equity is obviously going to do better than average, blah blah blah.  Here it is:

 

DAILY MORTGAGE RATES  (February 11, 2022) — Powered by OBMMI™

30-YR. CONFORMING

4.101% +0.030

30-YR. JUMBO

3.866% +0.170

30-YR. FHA

4.164% +0.042

30-YR. VA

3.905% +0.057

30-YR. USDA

4.046% +0.040

15-YR. CONFORMING

3.247% +0.008

[Gil Bang 25960]

well shit.

[Wulaw Horn 19073]

2 minutes ago, Gil Bang said:

well shit.

I just can't believe how fast it's all deteriorated. I just wrote a pre qual for a guy that I'd written one for December 30th and it was 1 & 1/8 of a point higher than it was then.  Damn it man.  Make it stop.  

I'm not sure if fed meeting notes got released from January 26th meeting or not yet.  I anticipate when that happens it gets even worse.  

[UTPhil2006 3807]

Jumbo > Conventional these days.

[Neonmoon 38129]

1 hour ago, UTPhil2006 said:

Jumbo > Conventional these days.

[Dbeasy 15052]

We have Broncos selling for $30k over list as per Gil. The faster rates move up the better for everyone longer term. Edit. Realize there’s a chip shortage but demand for all goods is artificially high. 

Edited February 14, 2022 by Dbeasy

[Wulaw Horn 19073]

47 minutes ago, Dbeasy said:

We have Broncos selling for $30k over list as per Gil. The faster rates move up the better for everyone longer term. Edit. Realize there’s a chip shortage but demand for all goods is artificially high. 

I mean, you aren't wrong necessarily, but yeah- it sucks.  It's just too fast is really my only complaint.  Getting there essentially overnight just suuuuuucks for everyone in the market, everyone looking to do something etc.  

[UTPhil2006 3807]

New day, same shit.  Had a good Friday, about 5 basis points back up yesterday, another 5 again today so far.

[Wulaw Horn 19073]

Yeah- the only thing apparently that can turn the market even slightly is the idea Russia is going to kick off a war. When those worries started to subside we gave back all of Friday's gains and then some on Monday, and now are off to the races on another bad day here today at 20 points down in the MBS market so far today. 
That doesn’t even count how the market is going to knee jerk freak out whenever the January minutes are released this week. I expect another 50 basis point hit to the MBS market whenever that little bundle of joy drops. 

[T’Boo Ted Marshall 2732]

Working with a builder on a construction loan. He will only allow us to use his local bank on the first part of a 2 close process.
Not a fan of being forced to use someone without competition. Is that typical?
With credit pulls being good for 120 days can the local bank use those reports if I provide to them?

[Wulaw Horn 19073]

8 minutes ago, T’Boo Ted Marshall said:

Working with a builder on a construction loan. He will only allow us to use his local bank on the first part of a 2 close process.
Not a fan of being forced to use someone without competition. Is that typical?
With credit pulls being good for 120 days can the local bank use those reports if I provide to them?

I don’t understand the question. What are you using the local bank for?  The construction loan?  Builder said you can only use his guy so what’s that about?

They are more likely than not going to have to pull their own version of your credit, but if you provide that report to them they ought to be able to use that for pricing purposes if you are just trying to get another set of eyes on the process. 

[Gil Bang 25960]

The builder and the bank have a mutual trust, and they make it easy on him to draw money.  He cares more about making it easy on him than about saving you money. 

That's all it boils down to.    Builders HATE paperwork/admin stuff, and most construction lenders require a lot of it. 

[LCHorn 2620]

Just my two cents but I also don’t think it’s worth the stress for you to worry about a percent or two on an interim construction interest only loan.  Your construction budget is probably up 20% over what it would have been if you broke ground last year this time, what’s 1% in interest?

[bluto 4929]

What’s going rate for appraisal cost these days? Standard single fam home in neighborhood, 1.25m value roughly. 

[UTPhil2006 3807]

27 minutes ago, bluto said:

What’s going rate for appraisal cost these days? Standard single fam home in neighborhood, 1.25m value roughly. 

I'd say for that size with no rush around 800

[T’Boo Ted Marshall 2732]

2 hours ago, LCHorn said:

Just my two cents but I also don’t think it’s worth the stress for you to worry about a percent or two on an interim construction interest only loan.  Your construction budget is probably up 20% over what it would have been if you broke ground last year this time, what’s 1% in interest?

I'm a bit of a haggler on often duplicitous or exaggerated fees, which could be the case in a 2 close process.    I can't get another option to keep them in check if they can tell me pound sand.  I agree with Gil, this is about convenience for the builder, not me.  

Even though our credit reports are only 60 days old they are telling me they have to order their own.