Invading my personal space/time.

[Kermit]

For those that hang out in IRC, you may have noticed that I haven't been around for the last few weeks. You may be breathing a sigh of relief for that fact. For those that own a home, you may want to know the reason why. We are swamped.

For those that read an occasional newspaper or have ever turned on that monitor in your living room that is not hooked up to a PC, you are probably aware that mortgage interest rates have dropped. We in the US are currently at or near historic all time lows for mortgage interest rates. Lenders we commonly work with have been locking people into 30 year loans at 4.75%. The national average depending on whom you ask and when is around 5.00%. The difference here being that the average is actually being brought up by lenders who are keeping their rates higher to keep more people from applying as they are already processing more loans than they can handle. The next step in attempting to actually keep customers away will be to advertise even lower rates and then hire large men to guard the doors and beat down unsuspecting home owners with large clubs and pepper spray.

Yesterday alone, we turned down more orders that we have sometimes received in an entire week. The moral of my story is two-fold:

If you own a home and believe that you have decent credit and at less than 80% of the value of your home mortgaged, put down whatever you are doing and call a banker.
I will be working whenever I am not sleeping, exercising myself and the dog, or playing with my children. WoW may become a thing of the past. Eating at this point has become optional and is usually only done in the car on my way to a house and only after answering, "no I do not want fries with that".

If you see or hear from me before Ground hog's day, kudos. If you do not, then assume 6 more weeks of paperwork.

[Falhawk]

I was considering it but I'm more worried that property values have dropped to the point where I no longer have 20% equity in my house (we bought it two years ago)

[Q]

I was considering it but I'm more worried that property values have dropped to the point where I no longer have 20% equity in my house (we bought it two years ago)

That's the boat we're in now. Based on a recent appraisal, we're running at 85-90% LTV :(.

[Postal]

I have been thinking about it but with so much else going on I haven't had the time. I need to though.

[Tai]

I just hate dealing with the hassle but I will check with a friend, thanks for the heads up.

[Paladin]

I got 5.25% on a 15-year fixed 3 years ago. Almost 60% equity in the home already. Not sure if it would be worth it for me to refi. Am I wrong?

[Kermit]

It totally depends on your personal situation. Right now the national average on 15 year loans is 4.75%, and I know of local banks and credit unions that are at or near 4.50%.

A half percentage lowering of your rate will save you apx $25/month on your payment per $100,000 of loan on a 15 year. About $33/month on a 30 for those that were wondering (rough numbers here, no reason to make it more complicated that it has to be).

So figure most places you are going to be at least $500 and more likely $1,000 in closing costs. On a $200,000 loan, it would take you 20 months to recoup the $1,000 in costs. It might be worth it assuming that you can absorb the costs when you "skip" a mortgage payment during the month that you close on the refi.

Given the info above, I can't be sure, but you can probebly scrub out the math based on the $25/m per half point drop per $100,000 in loans yourself. If not, there are an abundance of mortgage calculators out there, my personal favorite is the one at bankrate (http://www.bankrate.com/brm/mortgage-calculator.asp). Or feel free to PM or Email me some of the details. It's past 8pm local, I'm putting the kids to bed and going back into work. I'll crunch the numbers for you in my spare time.

[Paladin]

Thanks Kerm.

I was actually a mortgage broker for 2 years in the late 90's. I can calculate it, I'm just too lazy to. I don't think it's worth it for me though, as my mortgage is well under $100,000.

[Kermit]

In that case, you can definitely crunch the numbers better and faster than I.

Mortgage brokers for obvious reasons are high on my list of favorite people. Mortgage underwriters on the other hand are quickly dropping down the list.

The whole point of this thread though is this... don't expect to see much of me anytime soon.

[Tai]

but i miss you immensley in irc. :(

[F7]

What exactly do you do for a living Kermit? Banking or Real Estate?

[Tick]

My understanding was that Kermit was an appraiser, tho I may be wrong.

[F7]

Ahhh...my next questions were going to be where he perceives the housing market to be? Prices dropping further? For how long? When do you think the upturn will be?

[Kermit]

Yes, I work as an appraiser. (Not an assessor, please do not send me any dead fish in the mail)

As far as the housing market, I have no idea. Honestly. First of all, I appraise property in a 3-4 county area. I don't know if I could answer that question for my area, much less the entire country. Gut level feeling says that nation wide, we're nearing the low, but it's tough to see if low interest rates will lure people back into the market, especially since it's tough to get a low interest loan if you are transitionally unemployed.

Bottom line? The bubble burst. We (the 3 of us in this office) saw it coming for at least 6 months to a year before it happened, and my little corner of the globe, we are fairly well insulated against economic turmoil. Still, the prices around here dropped and continue to do so. I do not believe there will be a day that we can look back on and say "we've turned the corner, prices are heading back up". It's going to be a slow process, and that will actually be good for affordable housing. Low interest rates and low prices on homes will do more long term good for the working lower middle class than any government housing program.

[F7]

Any insight is good insight. Thanks Kermit.