I want my 4% loan!

[ContinentalOp]

Where does Obama stand on this? I haven't heard anything about it, and now it sounds like the Republicans are pushing for it? Why the hold up? It seems like a great idea. Sure it could be seen as prolonging the housing bubble a little longer but on the other hand it will allow millions of Americans to lower their monthly housing costs and put money into our pockets that can go back into consumer spending and help boost the economy rather than just putting more profits into the pockets of of the banking industry. It would also be nice to reward those homeowners who have always paid on time and are not on the brink of foreclosure.

http://abcnews.go.com/Politics/President44/Story?id=6748037&page=2

[CC]

1. I know there are

4.5% loans out there now if you can qualify.

[wryter2000]

3. Aye, there's the rub

"If you qualify." I only qualified for my original mortgage because I had my (now late) husband's social security income. My mortgage is now under water/upside down/whatever you call it. There's no way in h*ll I'd qualify for ANY kind of mortgage now.

[sandnsea]

9. Have you tried the FHA help?

They do have the authority to write the mortgage down and renegotiate. I think you have to miss a couple of payments to qualify though, which hurts your credit, etc etc. Then there are the new proposals which require you to be making a good faith effort to pay your mortgage. The problem with so many government programs is finding someone who can advise you how to make use of it.

[wryter2000]

21. I'm not willing to miss payments

I am hanging on, and I'd prefer that to getting into the red. I wouldn't be able to sleep, to tell you the truth. :scared: Plus, I do have excellent credit now, and I'd like to keep it that way.

[CC]

19. I know the hardest part

is so few qualify and they have made the terms harder. i wish some of them would figure out a lower interest rate and affordable payments are much better than nothing at all. then again we might not be in this position if they thought it through a head of time.

[ContinentalOp]

5. Nope there aren't

There's a lot of talk about them but I don't think they exist. We were offered a 4.5 percent with 2 points or a 4.875 with 1 point which we were about to go for, and then right when we called to lock it, the rates went up. Actual rates are at something like 5.5% now. And those are the Fannie Mae / Freddie Mac backed loans or whatever.

[CC]

20. Yes there are, a friend

refinanced with one, told us and we just refinanced to 4.5. My nephew just got one for a 4.3 buying one point first time home loan. Course these are from a small local bank and maybe that is the difference.

[ContinentalOp]

26. You got a 4.5% with no points? This was about a month ago right?

You got lucky, we didn't move fast enough and now those rates are gone.

[CC]

30. It was the first week of January.

Started looking around well before that though.

[ContinentalOp]

32. Yeah, it's too late now and we missed out.

We need some legislation that can keep the rates down at a reasonable level for a while IMO.

[CC]

42. I agree that we

legislation that can keep the rates down at a reasonable level for a while, a long while. Wishing you luck in your hunt for a reasonable rate.

[all.of.me]

36. Key word: Qualify.

Your rate depends on your credit score, employment, etc. I re-fi'ed lat month when rates were below 5%, but my credit cards were maxed, so my rate is 5.5%.

[ContinentalOp]

38. I have perfect credit and can't get below 5. I almost snuck in with a 4.875% at 1 point...

but then the very next day when I called to seal the deal it had risen to 5.25% at 1 point. I was so mad! I want one of these 4.5% loans everyone is talking about!

[all.of.me]

41. Stay in constant touch with a good mortgage broker.

S/he should call you as soon as rates go to where you want them to be, then lock in. A friend of mine got 4.3 with Wells Fargo, when it dropped that low for maybe an hour (hyperbole) last month. That's how I re-fi'ed. Rates dropped to 5 all of a sudden one morning, so she called me. Later that day, they were back up.

[wryter2000]

2. I can tell you...

That would move me from just making it by the skin of my teeth to breathing room. Breathing room means I'd spend money on things I need instead of making do. I really need a new bed for my back, but I really can't afford it.

[ContinentalOp]

7. Exactly! And it would be a great move politically.

This would be so much better than any kind of tax cut. A tax cut gives you what $1000 one time or something? Or maybe once a year? And the money comes out of much needed government revenues. Low interest rate home loans can save you hundreds of dollars every month, and the money is only taken away from banking industry profits that they don't deserve anyway. It's a total win win situation.

[tridim]

12. Have you looked at platform bed futons?

Quality futons are at least 50% cheaper than regular box-spring matresses or memory foam and IMO are the best option for back problems.

I've been sleeping on one for 12 years. I do use a memory foam pillow.

[wryter2000]

22. Thanks.

That's a good idea. Right now, I'm dealing with car issues. It's always something. :)

[tridim]

23. I hear ya. I'm dealing with dog problems and vet bills I can't afford. nt

[sandnsea]

4. lol, it would ruin every bank, especially local banks

Republicans know it and that's why they proposed the idea. No way this can pass, and I'll just leave it at that.

[ContinentalOp]

8. Why would it ruin banks?

This is why I asked, because I had a feeling there's some big reason why it won't happen if Obama isn't supporting the idea. Still I'm inclined to say "so what"?

[sandnsea]

11. That's how banks make their money

Interest on loans. Especially local banks. They have their accounts set up on various interest rates, depending on credit ratings. They've done it right. Now you want to come along and pull the rug out from them? So what??

[ContinentalOp]

15. So there's no profit to be made on a 4% loan?

Presumably the fed is already lending the banks money at far lower rates than this.

[sandnsea]

17. There are old loans

based on old rates, for one. For another, businesses do their accounting based on the income they actually have. Local banks have done that. The ones who haven't, who speculated on the income from soaring interest rates, are the ones who are broke. Putting everybody at a 4.5 rate punishes banks who did it right.

What we could do is put a moratorium on raising interest rates, no ARM resets. I think that's been proposed by Obama or Geitner or someone in the administration. Reducing the total mortgage amount has been proposed. Rewriting the bankruptcy laws has been proposed. A lot of helpful plans have been proposed. The Republicans haven't advocated anything sensible because all they want to do is throw out simplistic solutions that sound good, but don't work, like their stupid tax cut mantra.

[ContinentalOp]

27. No ARM resets and new bankruptcy laws are helpful...

for people who are stuck in a bad loan or on the brink of foreclosure. What about those of us on a 30 year fixed who have made all of our payments on time? Do you really think 4% mortgage rates wouldn't be a huge boost to the economy? That's extra cash in people's pockets every month for 30 years and the only cost is a tiny hit in the banks profits. Boo hoo, I think the banks will manage.

[Blue Dog Dominion]

24. Banks make their money on fees, not the interest rate

Origination points and other lender fees are how banks make money on mortgages.

[DJ13]

6. Unless we nationalize the banks I doubt it would happen

Like Bush, Obama's economic team seems inclined to try to "save" the banks while keeping them private.

Under that scenario they wont feel the need to give consumers a break.

[ContinentalOp]

10. Wouldn't they just be fannie/freddie backed loans?

Why would the banks need to be nationalized?

[DJ13]

16. Why would the banks need to be nationalized?

Because government seems incapable of demanding consumer protections from the banks even after giving them hundreds of billions of dollars already.

(And we arent done yet...)

Why wasnt there a demand by the government when the banks first came and begged for a bailout to limit the level of interest they charge credit card customers?

If they had done that 5 months back when Paulson knew he would be giving them billions there would be a lot fewer bankruptcies since then.

Our government is spending more money trying to keep the banks alive as they are, with the same crooked executives running them, than it would have cost to just buy the banks outright and force the changes that needs to happen.

[terisan]

25. Hear ! Hear! I agree.

[ContinentalOp]

28. I don't quite understand what you're saying.

You're either saying that Obama just wants to protect banking industry profits and doesn't care about helping people out, or you're saying that Obama actually does want to save the economy (or the banks?) and this 4% interest rate plan is a bad idea and the wrong way to go about doing it?

I can't figure out which scenario is correct. To me 4% home mortgages for everyone seems like a total no brainer and for the life of me I can't figure out why it's the Republicans who are supporting the idea rather than Obama.

[NNN0LHI]

13. All the banks around here are already below 5%. Its advertised on huge signs out front

My brothers adjustable rate mortgage just reset to 3%. Perhaps the GOP or ABC isn't aware of any of this?

Don

[ContinentalOp]

14. Yeah, maybe an ARM. Or with a bunch of points.

I'm talking a decent, no point, 30 year fixed loan. I think rates are about 5.5% right now with no points. If you can point me to a bank that will give me an under 5% loan, even with one point, I will be very grateful.

[sandnsea]

18. Okay, how did that happen

Because the people I know are still having their rates adjust upwards.

[ContinentalOp]

29. Can somebody point me to one single bank that's currently offering a 30 year fixed at under 5% ?

Preferably with only 1 point or less. There's a lot of anecdotal evidence here about low interest rates but I can't find a single bank that offers those kind of rates.

[Waiting For Everyman]

31. Just a quick example...

Yesterday they were advertizing 4 7/8 on TV, so the rate came down more...

http://www.ditech.com/

(don't know about points, and I'm not advoacting them - just one I happened to see)

[ContinentalOp]

33. Right, with 2 points. I could have gotten a 4.5 with 2 points a few weeks ago...

but that's a damn expensive loan. About $12k in closing costs in my case.

[Statistical]

39. Aimloan.com

I used them for our mortgage and right now am closing on a refinance at lower rate.
Instead of lowering the payment I am able to knock 6 years off our mortgage for same monthly payment (26 year loan, refinanced to 20).

30yr fixed $208K loaned (80% LTV)
4.500% 1.494 points (4.713% APR)
4.625% 1.020 points (4.798% APR)
4.750% 0.592 points (4.886% APR)
4.875% 0.217 point (4.978% APR)

[all.of.me]

34. Rates just went up to about 6%.

About a month ago, Wells Fargo had 4%, but probably for about 2 hours. Today Wells Fargo is at 6.375%.

[ContinentalOp]

35. Right, and yet people on this thread are saying "rates are low, we don't need to do anything"

I still haven't seen anyone give a solid explanation why Republicans are the ones advocating a 4% interest rate, and Obama doesn't seem to be in support of the idea.

[all.of.me]

37. I don't know what drives it.

I just know what I deal with. I really don't understand economics at all.

[sandnsea]

40. I have an idea

20 people owe you a million dollars each.

Let's let them only owe you 800,000 each.

You're going to lose four million dollars.

You still have 18 million dollars of expenses because you had a healthy 10% profit margin.

How long will you be in business if you don't pay all your bills?