Thursday, December 4, 2008

Silver Lining to the Downturn

There are positives to the economic mess. With the government announcing that it intended to drive mortgage rates down by buying up to a half-trillion dollars' worth of mortgage-backed securities, rates have been dropping. My mother, who works for a major mortgage company said it would be a good idea to check on refinancing. I called up the broker, then mom worked some magic, and as of tomorrow morning my rate will be locked at 5% for 60 days. We knew we wanted to refinance out of my 80/20 interest only loan, but we were hoping to wait until the house was more complete. With rates dropping and the ability to get a 60 day lock, we figured it was time to pull the trigger.

After we get back from vacation it will be a challenge to finish up the house before the appraisal. We figure we have about 45 days from tomorrow to fix things. We are going with an FHA loan, which will allow us to cash out up to 95% of the value of the home. To make sure we have the best opportunity to get money back we want the highest appraisal possible. There is discussion about rates going to 4.5%, but figured we didn't want to get greedy. Hopefully we made the right choice, but time will tell if we could have saved even more.

12 comments:

Steve said...

The 4.5% would only be for new purchases, no refinances. You got a good rate at 5%.

Kristin said...

YOU won...need your email though, sorry to leave a comment this way..

Hardware help...You all gave great advice! Send me your mailing address and I will try to have a lill something special their before the holiday! casa.reveal@gmail.com

Liz said...

I think you definitely did the right thing. Joey and I are coming to the end of our ARM and are also frantically rushing to finish more remodeling so we can get an appraisal and then refinance. On another note - hope you guys enjoyed Arizona!

Laura-Jane - Whimfield said...

Best of luck over the next 45 days! It's good to have a target date to work for... We need such a thing. Right now we don't even have a kitchen, and...it's probably going to stay that way for some time. :)

Ethan@OneProjectCloser said...

I'm looking into refinancing too. Seems that the drop in home values could be problematic. We'll see.

Jenny said...

Hey Corey...do you happen to have any awesome black and white pictures that you have taken of Bmore? My 35mm camera destored all my photos that I had taken and I really need one to finish decorating my bedroom. If so..how much? I plan on blowing it up to a 11x14.
thanks
jenny p.s. good luck on the next 45days!

Anonymous said...

You may feel like your timing's bad, but it's actually pretty good if you can keep everything afloat. When I was in my 20s, banks typically required 20 percent down and would lend no more than three times your annual salary (and only two times if you didn't have a long work/credit history). So there's a lot more opportunity today, for those who have the nerves of steel.

Corey said...

Hey Jenny,

Take a look back at things tagged wtih photography, and let me know if there are any you like. I can make a black and white out of any of them. Personally, my favorite is the b&w of the dominos sugar mill.

The pictures are close to 11x14 when taken, so they could even be blown up much larger. Send you email and we can work out the details. :-)

Corey said...

anony - I wish I could say I had nerves of steel, but rather I am only choosing to play the hand dealt to me. Folding isn't really an option.

Corey said...

Liz & Laura-Jane,

Good luck on trying to finish things up. This month will be a challenge, but the forced deadline will really make us focus.

RehabOrDie said...

I've been there...like a week and a half ago.

As I mentioned below, get with the appraiser that they use and ask him where your focus should be. Also, sniff around and see if you can't find ways to cause the bank to delay on their end (but not on your end), so you can get a bit more time.

If the bank can't "get it together" by the end of the rate lock, it's not your fault and they'll still honor the rate. Our bank actually held off closing a month after the lock was up.

Mark

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