mortgage/home loan advice

[redsquirrel]

Yo redsquirel, cmon fannie mae throw us a bone, are they pushing the sale of fixed rates at work because they think rates are gonnna stay low or are they pushing trackers cos they think rates are gonna move up in the next year?

LOL. Nope- they will really continue to push fixed rates for a LONG time. ARMS are a huge part of why so many people went into default and the banks foreclosed. Although the initial payments are less than a fixed rate, when the rate adjusts after the fixed period- people weren't prepared and couldn't make the payment. Now, Fannie Mae requires that you qualify with the fully adjusted & amortized payment...instead of before, where it would qualify you on the initial payment.

There's just much less risk w/ fixed rates now. The reason why in your case, they may be pushing the trackers is because the investors aren't making the money they were when they were buying all the ARM paper.

[the art of war]

Ugh, I hate having to grow up - I wish I was back with my boys in college lol

[mindstar]

do you have floating rate products with a guarantee not to go over xx% or an ability to lock in at the current rate at any time? Those are available up north...I know a lot of people with floating mortgages riding the low interest rates right now, but I locked in at 3.55 for 5 years. In 4 years when my mortgage is up, it'll be time to upgrade anyways.

[Mr I]

so I signed the papers tonight, that's to switch out of my fixed rate of 5.55% to a tracker at 1.99% over base/LIBOR which is currently 0.5% in the uk. Its costing me £3,300 to pay the penalty to get out but if the interest rate stays as it is for just 7 months I will have cleared the £3,300 hurdle because I'm saving £500 a month on interest rate difference.

the base rate/LIBOR would have to get to to over 3.5% before the tracker option would exceed what I'm paying now so I think its the right choice for us.

[ROCKETW19]

so I signed the papers tonight, that's to switch out of my fixed rate of 5.55% to a tracker at 1.99% over base/LIBOR which is currently 0.5% in the uk. Its costing me £3,300 to pay the penalty to get out but if the interest rate stays as it is for just 7 months I will have cleared the £3,300 hurdle because I'm saving £500 a month on interest rate difference.

the base rate/LIBOR would have to get to to over 3.5% before the tracker option would exceed what I'm paying now so I think its the right choice for us.

cool how long do you have to stay in this new loan? what are the peneltys?

[Mr I]

cool how long do you have to stay in this new loan? what are the peneltys?

no penalties, leave at any time:thumup:

[ROCKETW19]

no penalties, leave at any time:thumup:

good shit then. hopefully you can save alota cash

[redsquirrel]

so I signed the papers tonight, that's to switch out of my fixed rate of 5.55% to a tracker at 1.99% over base/LIBOR which is currently 0.5% in the uk. Its costing me £3,300 to pay the penalty to get out but if the interest rate stays as it is for just 7 months I will have cleared the £3,300 hurdle because I'm saving £500 a month on interest rate difference.

the base rate/LIBOR would have to get to to over 3.5% before the tracker option would exceed what I'm paying now so I think its the right choice for us.

Sounds like a smart move! When is your rate up go review? Or is it variable monthly? Usually they are locked from 3-12 months...even in 12 months, the libor will not be 3.5%. When we got this current loan, I think it was at 3.2- and that was right before the housing bubble popped.

[Mr I]

Sounds like a smart move! When is your rate up go review? Or is it variable monthly? Usually they are locked from 3-12 months...even in 12 months, the libor will not be 3.5%. When we got this current loan, I think it was at 3.2- and that was right before the housing bubble popped.

It is a tracker rate, so it corrresponds with the LIBOR WITH A MARGIN OF 1.99% over. If LIBOR goes up 0.5% then my tracker goes up 0.5%