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Mortgage Folks- need an analysis.


Kilmer17

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New house will be complete in about 60 days. 

 

I can lock today between 4.25 and 4.5 with a fee of about 1500.00.

 

Anyone want to give their opinion on whether next week (or two) will get me a better deal?  Whether its a lower rate or smaller fee, or even possible lender credit?

 

Whats the vision of the immediate future?

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IN GENERAL interest rates are on the rise. However prime was 3.25% a month ago, it was 3.25% a year ago, and it's 3.25% today. 

 

In the grand scheme of things 4.25 and 4.5% is still very low. 

 

The FED recently appointed a new chair and recently they've revised guidelines on when to raise interest rates as economic conditions continue to improve. 

 

I think the best thing to do is to calculate how much you would pay in interest over the life of the loan at quarter point intervals should the rates rise. Cross check that against $1500 lock fee and see if it's worth it for you. For a $400k loan the difference in a 30 year mortgage between 4.5% and 4.75% is $21K over the life of the loan. But on a $160K loan the difference between 4.5 and 4.75 is "only" 8K

 

That was one of the more anxious aspects of my mortgage process, because it's out there and I have no control over it and no true real insight. 

 

If you have some flex in your budget I'd let it ride. Latest statement from the Fed says they'll leave the interest rates alone until late 2014. But if your budget only works up to a certain number and you lose that number if the rate goes above 4.5% then I'd lock it in. 

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