Hi, I'm not going to tell you to do one thing or the other, but just register what impression I'm left with after reading your note. It just 'feels' like the kind of slippery slope thinking that got everyone in trouble last year, promising the moon, but making your house the fall guy (or you) if things don't work out. I would at least get some advice from other financial people who have less of a stake in your place themselves and see what they think (we are not those people, except possibly Dave Donhoff).

Hello? Did I hear my name? Ahhh... Lucy conjured me up ;~)

Hi KittieMom,

Does your banker have true brokering capabilities too (some do.) Ask. If he does, ask him to independently contact the servicing arm of your HELOC provider and inquire as to their current re-subordination valuation policies. Some HELOC lenders (Chase, as an example) are playing very rigid to current guidelines and requiring any existing HELOCs to be reduced to CURRENT limits in order to agree to resubordinate (in essence... makes it pointless to resubordinate... its easier to simply have a fresh line set up.)

You DO realize that your Friday's "quote' was only good at that moment, yes? Today its only relevance is a general rough "area" of the market. Further... even if you get another so-called "quote" as you are reading this post, it is meaningless unless/until it is locked and hedged, and the most competitive lenders generally require your file to be complete, appraisal complete, and updated title report in prior to a short-term (lowest rate) lock.

Long-term locks (the kind you can get by dialing-for-quotes before you've completed a full package with a provider) are, by their very nature, at a fairly pricey premium (or else they're a bait & switch game.)

MY RECOMENDATION; Whoever you choose, make sure you trust their professionalism & competence... and ONLY go with an originator with a market background (bonds, securities, etc.) who has the ability to "float and watch the market" for a specific rate lock.

We're building up a list of our clients that we're floating for a target lock at around 4.5% We're not there yet... but when we hit it the market may not stay down long enough for the general "quote-shopping public" to take advantage. I could be wrong... maybe everyone will easily get 4.5% or even better... but I don't think so. I am very suspicious of the wileyness of "Mr. Market" in our current environment.

Cheers,
Dave Donhoff
Leverage Planner

Any advice would be appreciated.

My own philosophy is to refinance only when it makes sense after crunching the numbers and ONLY refinance the balance of the mortgage. Using $5K for "things around the house" is using your home as an ATM and that's what got so many people into trouble last year. Additionally, that $5K when you add the interest over 30 years becomes several times $5K.
Just my .02

We're building up a list of our clients that we're floating for a target lock at around 4.5% We're not there yet... but when we hit it the market may not stay down long enough for the general "quote-shopping public" to take advantage. I could be wrong... maybe everyone will easily get 4.5% or even better... but I don't think so. I am very suspicious of the wileyness of "Mr. Market" in our current environment.

Dave, do you believe fixed rate mortgages will get down to 4.5%, even just for a short time? Those that your company is floating, are they looking for 4.5% with, or without, points?

Hi JBSpook,

Dave, do you believe fixed rate mortgages will get down to 4.5%, even just for a short time?

We've ALREADY been grabbing locks on 30 FRMs at the 4.5% levels, and today we saw it as low as 4.375 (par, no discount points.)

For the patient who get their financial files pre-prepared with a good lender (as described above... and "advisory" type, not a 'loan salesperson') I foresee the potential (knockon wood) of possibly capturing 30 FRMs at the 4% flat level.

Those that your company is floating, are they looking for 4.5% with, or without, points?

Well... it depends (you knew that was coming, no?)

The clients we have that use our "target rate-lock watch" service name their own target interest rate and desired point structure (with our advice, if they want it.) Our service fee for this daily watch, and ultimate completion, is rolled inside the financing (almost always equity-paid, since the rates are too cheap to make sense of paying in cash, or a rate-premium (also known as "reverse points...)) so ultimately they get EXACTLY what they are looking for (without any surprise costs) if/when the market puts us in the position to get an advanced negotiated lock out of the lenders.

Our firm's in a bit of a unique position with several funding lenders because over time our volume, along with the quality of the client files we package, has let us grow a reputation for delivering certain quality to the lenders. This gives us a bit of additional "rate-lock negotiating pull"... especially when they know we can deliver to them a streamlined closeable file that will take very little administrative effort and cleanly be re-sellable to Fannie or Freddie. Since virtually 100% of our clients come in to us on an advisory basis, they tend to be of a higher quality themselves, and later cause much trouble (defaults, disputes, etc.) to the servicing departments.

We currently have clients with target locks set for rates from 3.75% upwards... on both 30 FRMs and 15 FRMs.

Of course... those with the lowest rate targets are fully aware, and accepting, that they may completely miss out if the rates don't reach their levels... but they're OK with that.

Cheers,
Dave Donhoff
Leverage Planner

Dave: "We've ALREADY been grabbing locks on 30 FRMs at the 4.5% levels, and today we saw it as low as 4.375 (par, no discount points.)"

Are these rates area-specific, or can I get them in MASS?
I've checked w/ 3 lenders for 30yrs fixed w/ 40%equity borrowing $270K and credit score of 800:
- 5.375% w/ 0pts/$0 closing costs
- 5% w/ 0pts/$2500 closing costs
- 4.875% w/ 0pts/$2500 closing costs

But no one even came close to 4.5%.
I've been checking w/ them for several weeks, even during that crazy Wednesday morning (where some lenders got rates of ~4%).

I'd love to get better than 4.875%. How/where?

Thanks.

We have been considering refinancing for a little while. We just filed the paperwork with our bank for a 15 year fixed at 4.25%. We will have to pay 2 points at closing. The bank also has 15 year fixed at 4.75% with no points.

These are rates in Fairfield County, CT.

Enjoy the journey.
eal51 in western CT

Hi Huango,

Are these rates area-specific, or can I get them in MASS?

Available nationally, not location specific.

Be aware, rates are wildly bouncing all over the place in general, and in addition specific lenders are sometimes temporarily artificially inflating their own rates to slow down their volume/flood of refinances in order to let their staffs catch up.

Now is the time when a good broker is handy since they typically have many (from dozens to hundreds) of funding banks and can quickly determine which are at the more competitive rates at the moment, *AND* which have the most reasonable turn-times (and are thus more likely to process to close smoothly.)

Trying to shop retail, as an individual regular consumer with one loan to fund, is simply a recipe for insanity in the current environment, IMO.

Cheers,
Dave Donhoff
Leverage Planner

We're in IL and are now refinancing to get a 15 yr fixed at 4 3/8%, no points and the lender is picking up about 2/3 of our fees. We may have missed the last 1/8% on the rate, but that's ok to us. The good news is that I'm fairly confident this will be our last refinance!!!

I'm also looking at rates - WA state.

On Monday, I called 5 banks. I was quoted 4.75 (0 points) 4.25 (1 point). I'm going in tomorrow to talk to the mortgage person with the bank that has our current mortgage. But if they aren't competitive, I'll go elsewhere.

We intend to use the difference in the monthly payment to apply to the principle and aggressively get this puppy paid off, so this should be our last refinance too.

Dave: "Trying to shop retail, as an individual regular consumer with one loan to fund, is simply a recipe for insanity in the current environment."

So what am I to do, as an average homeowner?

I've been using my current lender for over 6 years, but he's the one who couldn't go lower than 5.125% w/ 0pts/$2200 closing costs.
thanks.

Hi Huango,

So what am I to do, as an average homeowner?
I've been using my current lender for over 6 years, but he's the one who couldn't go lower than 5.125% w/ 0pts/$2200 closing costs.
thanks.

If your current lender is a captive retail loan officer (only able to fund from his own company's programs,) you may find it time to shop an independent brokerage loan officer.

Only brokers can operate as a fiduciary (that is, with a financial focus in your best interests, as opposed to representing the bank.) Of course, that doesn't mean ALL brokers WILL do so... thereby, you need to shop carefully for character & competence.

Luck,
Dave Donhoff
Leverage Planner