I've been watching the rates to lock in. Basically looking at 4% now without buying points. How much lower can I expect this to go with the probably drop in rates from the Fed?

There's a good chance rates will go down, unless they don't.

Buy whenever you want and refinance if rates drop enough later to make it worthwhile. I’d recommend making sure your mortgage doesn’t have any prepayment penalties so you have the option of paying it down faster should you so desire (can save a lot of interest costs over the years).

I remember the quote by the chief corporate economist for Wells Fargo, Dr. Sung Won Sohn, when asked this same question at a community forum that I attended.

He brilliantly responded, “Rates will either go up or rates will go down, but not right away.”

He was visionary.

Got 3.77% a month or so ago on a 20yr. Very happy with that.No points, very minor fees. Lender guarantee's it will keep it in house for the duration.

You will not get much lower than they are now unless three things happen:
A) The fed reduces the FOMC rate by more than 25 basis points on Wednesday
B) Economic data starts showing a greater slowdown
C) Mortgage applications start dropping like a rock.

Here is the issue, the US economy, while not as good as it was a year ago, is still loads better than any other major economy in the world. Look at our 10Year treasury, as of close today it was a 2.06%. Meaning you earn $2.06 in interest for every $100 you invest in the 10 year treasury, per year. Lets look at a few others:
Germany (0.39%)
Japan (0.15%)
UK 0.65%
France (0.14%)

So the US economy as measured by GDP output is still growing, while the other four are not, and historically, 10Yr treasury is a yardstick for future economic growth (measured by GDP).

While the 10 yr has slipped quite dramatically since November 2018 (3.24%/ highest level since May 2011), Mortgage rates have only come down by about 1%. It would take a shit load of bad news to coax mortgage rates much lower, and home sales would have to nosedive for that to happen.

I am not seeing anything in the near future to suggest that is going to happen. Get your 4%, and don't pay for any points.

Also, you can get a gauge of the mortgage market by looking at the steps between 15, 20 and 30 year.The spread between the 15 and 30 is only 75 basis points, suggesting the 15 year is at a near bottom, and there is rate compression. Rate compression means there is not much downward movement because rates are so low.

If you qualify for VA lending, 30 year rates are about 3.4%

Shop for a lender that will adjust the rate if it goes lower before closing.
The truth is that they are so low nowadays it really doesn't matter much. My first home loan, at the end of the Jimmy Carter disaster, was 13.5% and I had perfect credit and money down. Less than a year later it was 19.5% for most.

30 fixed with no points assuming a good loan to value ? You should easily be able to get 3.25-3.5 with no points right now.

I think a fed cut is 100% baked into the current long term rates. If you have a HELOC then you will likely benefit from a lower rate if the Fed cuts short term rates

If you see the 10 year dip back under 2% and you still haven’t locked its time to get on the ball

For those of you that were still on the fence, 30 yr money easily had for less than 3% now.

Another record low mortgage rate just caused demand to jump for both refinances and home purchases

I just locked in 2.5% on a 15 yr refi yesterday

Waiting on closing with Space Coast Credit Union. VA refinance for 15 years, no lender fees, extra .25% off for first responder, ending up at 2.4%. On the mortgage, I'll be paying about $100 more a month, but shaving 7 years off the present 30 year loan. I'm borrowing enough to pay off a home repair loan and an auto loan, but overall will be paying $500 less a month.

Think twice about combining the auto loan into a 15 year obligation. That's a long time to finance an intermediate term asset.

I just hope rates stay this low for another 5-6 months. We are currently having a house built and aren’t closing until July. Was told by our lender that we’d have a 2.75% rate if we closed today (30 year Jumbo).

quote:

Originally posted by Copefree:
Was told by our lender that we’d have a 2.75% rate if we closed today (30 year Jumbo).

Nice! I got 2.25% back in June/July, but that was on a USDA Rural Development loan, which tend to be a bit lower than usual. That's an outstanding rate on a non-subsidized loan!

Who’s quoting you 4% ?!

I’m in the mortgage biz and I’m doing purchase money 30 fix under 3 and refis at 3.15-3.35 depending on LTV. 0 points and you pay normal closing costs.

I’m losing deals to the mega banks who are putting people into mid 2’s for 30 with some deposit consideration that are not binding

I have 7 or 10 year ARMs mid to high 2’s for purchase and refis. Again 0 points. Owner occupied. I’m a direct lender at a real bank not a mortgage broker.

I also believe rates will stay low for a considerable amount of time. At least through 2021

quote:

Originally posted by ElToro:
Who’s quoting you 4% ?!...

The OP was a year and a half ago.

I refinanced this summer with LoanDepot for 15 years at 2.5%

Just got locked in at 2.25% for a refi. 2.5 APR. That’s $170,000 less in interest than my current mortgage at 4.875% APR. Much less than that if we just keep paying the current payment on the new loan.

Insane.

I haven't followed mortgage rates for some time but just for reference for you young ones back when I was borrowing to buy homes I paid 10% 20 yr, 11% 20 yr, 16% 20 yr, then 9.5% 15 yr.

Closed on a house Sept 25th. 1.99% 15 yr mortgage.