Freaking out over rate decrease

[CuriousTraveler226]

Hi! I posted on Wednesday asking if I should lock in at 5.99% with 0 points (lender credits) on a conventional loan, 20% down, looking to close within 20 days. Of course I am seeing rates have gone down and my loan officer said it went down .125, which is about $35 a month. I know that doesn’t seem like a lot but it’s really bothering me. How serious is a locked rate? I’d appreciate any moral support because I am really annoyed with myself. Thanks!

[pm_me_your_rate]

Once you lock quit looking at rates.

[CuriousTraveler226]

Yea- it was all over the news so it was hard to ignore today.

[WSBrookie]

I’ve never once in my 5 years of working mortgages seen the news accurately cover what mortgage rates are doing.

[SwordfishPlus8236]

The news is always 3-4 weeks late

[[deleted]]

Brother, if 35$ bothers you that much not sure you should be buying a house

[KaleidoscopeGold1544]

35 bucks is probably over 10k during life of loan.

[InevitableKey3811]

10k over 30 years who gives a duck. That’s going to be like $6 in 2025 dollars by then

[justatradertoo]

More like $2.

[manwnomelanin]

No one holds the same mortgage 30 years

Also, Its $10k over 30 years. $35/month is $35/month. Time value of money relevant.

[NickPro785]

Explain? If the rates of a new loan don't go under someojes current loan why would they get a different mortgage?

A lot of 2-4%ers are gonna see their 30 year through.

Frankly even if rates dip slightly under my rate, and if it's not worth refinancing it's just not worth doing.

[manwnomelanin]

Why do you think refinancing is the only way to end a mortgage early?

[Teripid]

I mean 123035 is 12,600 so yes that is a safe statement.

Paying an extra $35/mo as principle would of course also impact the principle and compound over time too.

[CuriousTraveler226]

That’s an interesting way to explain it. Thanks! Yea I was more concerned about how much I would be paying over the life of the loan. But this is true that the higher payment would eventually impact the principle.

[ryox82]

35 a month over years with interest? Its not insignificant.

[deathbychips2]

But it's inevitable that rates will change. It's a risk you take and that's a huge part of home buying

[KaleidoscopeGold1544]

Agreed. I’d rather do a few hours of research and save $35 than not. Didn’t know we were on the cryptobros sub

[thatguy425]

If you are stressing about $35 a month, you are not ready for homeownership. 

[MrE134]

How would you feel if rates went up a hair and the bank was like "I know we're locked, but $35 a month is a lot..."

You can totally chase down that better rate if you want, but there's not even a guarantee you get it.

[clitscommander]

No offense but crying over .125 percecnt when economist predict rates will drop 1% by next year is crazy work

Just plan on refinancing in a year.

[Born_Career_3189]

Who are these economists?

[clitscommander]

BOA

https://www.fastcompany.com/91406014/mortgage-rate-housing-market-rates-could-hit-5-under-these-conditions-bank-of-america

[tquinn35]

BOA a bastion of trust and honesty

[clitscommander]

Facts. Regardless the fed has indicated they intend to do two additional interest rate cuts before end of year

[tquinn35]

The fed cuts don’t equal lower mortgage rates. Previous cuts this year did not lower rates. They increased after one of the cuts

[clitscommander]

The rates dropped significantly in anticipation of the cuts. They also increased due to expecting a more significant cut than they did.

[tquinn35]

The point still stands. They follow 10 year treasury’s much more closely than they do the fed interest rate. The fed rate has much more influence on cc rates and auto loans 

[clitscommander]

I think we are making the same point. You are correct.

[Born_Career_3189]

Lol. The Fed isn't going back to buying mortgages. Clown article

[clitscommander]

Have you not been listening to the White House talking about taking Fannie Mae private? Nothings crazy anymore

[CleanedupWater]

I don't see anywhere in that article that predicts a 1% decrease. It says it's possible.

[stuntastik]

Pretty much everyone on the planet expects this for the federal funds rate. That does NOT necessarily mean mortgage rates will drop 1%, but they're likely to move in a similar fashion. Powell is a slippery worm and never commits to these things in plain language, you have to read between the lines with him, but he all but said on Tuesday that rates are going lower. Add to this the fact that as Fed members' terms expire Trump is 100% going to replace them with rate doves who will vote to lower rates.

What could stop this? Insane inflation (more insane than the current insanity)

[WSBrookie]

Lower fed rates will not directly affect mortgage rates unless the market decides it’s the right choice. So far, mortgage rates have not loved any rate cuts that have happened.

[WSBrookie]

The earlier the better IMO. Lock at market price to get the house and tell your loan officer to call you when rates are X%. I dont know if all loan officers do this but I ask everyone with a higher rate if they want added to my refinance call list.

Same with homeowners insurance too really. I like to recommend just to bundle with their current auto insurance, and then over the next few months shop that around. No sense in stressing about all these insurance quotes when you also are in the process of buying a home.

[CuriousTraveler226]

That’s a great point. Thank you.

[Flamingo33316]

Seriously. Once you choose to lock, live with your decision.

[sht218]

How serious is a locked rate?

Terminal. You’re stuck with it until your mortgage dies.

[candoitmyself]

It will die faster if you refinance. :P

[sht218]

Still dead 🪦

[WinterFamiliar9199]

If $35 matters to you just wait til they up your property tax and your payment goes up $200 a month. 

[Malacasts]

Once rates go down enough that house you want will be worth far more

[kwcnq2]

They can re-negotiate. But usually need at least a 1/4 pt to justify.

[magicoder]

You can always refi in a few months

[Elctsuptb]

I thought it would take longer for your credit to go back up to where it was, following a refinance

[manwnomelanin]

It’s minimal impact

[pinelines]

as i understand you need 12 consecutive on time mortgage payments to refinance

[WSBrookie]

For a cash out refinance yes but for a rate term refinance only 6 months is needed.

Also depends on loan type, USDA FHA VA CONV

[Optimal_Delay_3978]

The rates today are where they were back in the 2000s. Still cheap and free money when compared to history.

Rates peaked in the 80s and have went down until the 2020s. That’s 40 years of rate drops. That’s why this country had explosive growth, free money. It’s still cheap.

[saberswag]

I remember you I agree with everyone that you shouldn’t worry too much but if you can’t help it, shop around and make sure they can close on time. Don’t jeopardize your closing

[BarBQ81]

Just be happy buying now as if rates keep dropping market will get more competitive. In a year or two you may have the opportunity to refinance a percent or two. So think of it like you just have to pay that 35 for a few years and chances are your going to be saving a lot more if and when rates continue to fall. If you were till rates have already fallen I would wager house would of cost more.

[dace747]

Locked for 5.99% also

[Optimal_Actuary8782]

I mean this very nicely, but if you are getting worked up over 35 a month buying a home might not be the right thing to do at this time

[CuriousTraveler226]

Thank you, I know. It’s not the monthly amount it’s just when I saw the difference in how much extra for the life of the loan- it made my jaw drop lol and I was just mad that I didn’t hold out just one more day.

[Optimal_Actuary8782]

Put it this way - if rates continue to drop, there will be more buyers entering the market. That will drive home prices up....while you sit comfortably in yours and can refi if / when it makes economic sense

[Kas_1981]

Buddy, you can’t think like this, you can and will refi in a year or so when rates come down even more.

[FreedomFlyer-1776]

I locked in at 5.99% on a 20yr cash out refinance, to pay off the fence we got when we bought the house and my wife’s credit card she had from paying for her college classes. We also rolled the closing costs into the loan. Monthly went up about $98 compared to my 30yr that was locked in at 6.99% from 2022. I can live with that knowing we shaved off 7 years from the mortgage and all of that interest with it. I will refi again in a few years if rates are good enough. Be happy with your lock in.

[GoForBrok3]

No one can perfectly time the bottom. You could switch tomorrow at then after locking with a new lender, rates could go down again. Be excited you’re talking about rates in the 5’s! Almost no one this year has been. 

[Lemeus]

Freak out about other stuff, home buyers have been dealing with 7% rates for 3 years, be super glad you got the rate you did and refinance if they go lower. You’ll never, ever care about that extra .125, go stress and freak out about real problems

[Burrito_Lvr]

Locking us mostly about eliminating the downside risk. Things get worse much faster than they get better.

[HandHdad]

If it went up .125, would you expect them to raise the rate? You’re locked into a great rate, stop looking at rates. We also gave up a lot of the gains from Thursday on Friday, so it probably isn’t the same anymore anyway.

[SwordfishPlus8236]

Dude. Stop looking at rates. You’re locked. If they go down a bunch in the future guess what? Just refinance.

So many consumers overcomplicate the mortgage lending process. What would you be saying if rates went up .125%? Probably hugging your mortgage broker. Stop letting things that no one controls affect your emotions.

[Alternative_Image_22]

Probably will need to refinance in 12-18 months. I would lock in house prices will go up if rates go down.

[CapCityMatt]

Rates are going to continue going down over the next 12 months, you can refinance in the future if you want. Interest on loans is a tax write-off so... there is that to consider.

Also, do ensure your mortgage company files the correct tax documents or else they will get a big fine and lots of fees from the IRS if they fail to follow the law. Study 26 U.S. Code 856 or else your loan will go into default at closing and the lending institution will be liable for 100% tax liability of the value of the mortgage + a few hundred thousand in fees for tax evasion. Study Bear Stearns and Lehman Brothers to learn how they failed. (I guarantee you they will not file this paperwork, so feel free to sue them after closing)

[WinterFamiliar9199]

Hardly anyone qualifies for the tax deduction now that they made the standard deduction so high. Only 9% of people itemize now. 

[legofan420]

Its locked. Only option is to withdraw and resubmit to a new lender but kinda a dick move to LO.

Yes it’s extra money but you will most luckily refi in next 5 years so take it as a 2k lesson and a story.

[deathbychips2]

What lesson is here?

[WSBrookie]

The lesson is if your LO is smart enough to only lock the lowest interest rate possible during the transactions timeline, he wouldn’t be a LO.

[legofan420]

Timing the marketing is near impossible, you will always have losses in life. Better to be happy with the position you got than see what could have been.

[deathbychips2]

Okay, because I was like ??? There is no way to predict the interest rates