IF YOU OWN A HOME...

Fixed rates are good as long at it is not a:  Pick-a-payment, interest only, negative amoritization, or any of the other crap that customers can be duped into even with a fixed rate lone.  (note:  Not implying you do, or even would, just making a statement).

Question, do you do Scheduled or Simple interest mortgages?

Since you are in the mortgage industry, here's a serious question for you:

What is the average call back cycle to past clients to talk with them about refi'ing again?

And if you don't own a home... now might be the time to get one.

E's looking at the housing market near us with fresh eyes now.  We've got the savings to put down a nice DP.  I think it's about as low as it's going to go...
 

One many great misleads of the money industry is that it is ALL about rate, rate, rate….and monthly payment.

The ONLY function of rate is to set the payment.  It is how the rate is applied to the loan that is the great equalizer.  It is possible to have a higher rate and still get out of debt faster if the method of applying that rate to the load is a Simple Interest loan and not a Schedule interest loan.  It may not work every time depending on the difference in the rate (exaggeration example of say 7% Scheduled vs. 15% Simple) but hopefully you get the idea.

It is not all about the rate.  It is about:  How long a consumer will be in debt and How much interest will the consumer pay (or save) over the life of the loan.

Yet the industry, for decades, as ingrained in the consumers head that it is all about rate.  So much so, that is the only thing the average person thinks about after the question of, Can I afford the payment.

When it comes to credit cards there are approximately 36 ways to compute the interest rate they charge and that depends on the company.

P.S.  On interest rate (or Note Rate), yeah that’s great.   For any potential Refi-ers out there, MAKE SURE to look at the Federal Truth In Lending Statement this is part of the mortgage documents.  On it is a box that lists that A.P.R. (Annual Percentage Rate).  Check the APR against the Note Rate that is quoted.  Most likely it will be higher than the Note Rate.  That APR is the true cost of doing business and the interest rate that is actually being applied to your loan.

Madkat - I'd be interested to know why you think this is true for the market where you are looking.

It's pretty low here right now.  We're mainly looking in the Sonoma County, CA, area and it's really taken a hit over the last year and a half.  The median house price around here has dropped over 100k in the last year, with houses sitting on the market for an average of 6 months.

The condo across the way from us was on the market for 2 years, and they finally sold it last week.  We watched it drop from $450k to $375k, and I'll bet you the people in there paid even less than that.  There are pre-foreclosure signs up all over around here, so I believe people who are in a bad way are very motivated to sell their property, even at a loss. 

But... it can only go back up in the future.  There will never be enough houses for all the people who want to live here, which is what has driven the real estate boom of the last 10 years.

Yes, it might go a bit lower over the next couple of months, but I think it's pretty close to the bottom. 

Great.  Now, how many of those Refi’s included a DEBT FREEDOM plan?  Or, how many of them came with the education to make it the Last lone and not just the next one?

Again, Refi and free up money for a family.  Great.  They take that money, go get themselves into debt again, and refi again a few years later.  By doing that, the consumer barely gets any principle knocked off the load before refi’ing again and paying the lender interest upon interest.

Congrats to your wife on that volume of loans.  But if some of those refi families are called back in the next 3-5 years to refi again because of rate rate rate, then I take a serious issue with keeping families debt and not educating them on the concept that it is possible to get and stay debt free.

Countywide DOWN, not to take out the rest or make them change their ways.

P.S. by successful do you mean, in order to reap the profits of making interest for a few years, refi-ing them and making more interest and keeping a consumer in that never ending loop?

My wife works at Summit Credit Union and an inhouse 10-year fixed is at 4.75%.  We are rolling our 2nd mortgage from our finished basement into our house mortgage and will still pay less than what we are doing now with one less payment and in the same amount of time left.  Woo hoo!!  Locking in today, and if the rate drops during our paperwork, we get the lower amount!  Double bonus.

Here is another lovely of the mortgage industry:  Yield Spread Premium

If a client qualifies at, for example, 5% and the mortgage broker gets that client to sign off on a 6% loan by obviously not telling the client about the 5% and letting them know they qualified at 6%, the mortgage broker is paid more for duping the client and selling a higher interest loan.

http://www.thetruthaboutmortgage.com/mortgage-dictionary/yield-spread-premium/

While I agree with the concept ty, and think any good broker should do what's in the best financial interest of their clients, I don't think a broker should have the responsibility of financial planning. 

Frankly, for many people at certain income levels, mortgage debt (with its associated interest writeoff) is not by definition a bad thing.  Accrued equity is also a way for people to move into better homes/ neighborhoods (notice I didn't say McMansions or buying beyond means).

Anyway, that's just the .02 of someone trying to get into the market and hoping rates and prices stay low (or go lower)

Sounds like you guys are taking a smart apprach - google yielded an interesting recent article about the house market in Sonoma

http://www1.pressdemocrat.com/article/20080117/NEWS/801170374/0/BUSINESS01

Some unusually frank language from RE professionals in this article: 

"Job growth isn't that strong. Job creation has a direct impact on housing demand and that feeds into prices," said David Berson, chief economist for PMI Mortgage Insurance, of Walnut Creek. "There's just an overall lack of housing demand. The inventories are just way too high."
...[His company predicts that:] Home prices face a 58 percent chance of falling in Sonoma County in two years, up from a 38 percent chance just three months ago.

"The ability to negotiate now is probably as good as I've ever seen it. You're not competing with everybody. You're not competing with a lot of investors, though I expect them to start coming back," he [Brian Connell, broker-manager for Frank Howard Allen Realtors in Santa Rosa]  said. "But it's also possible that we may have another year of grinding through it and the market doesn't level out until 2009."

My thoughts: When a realtor accidentally slips and predicts two years until the bottom, that appears to me to be a sign to wait for the blood to flow for a while.

Sounds like you are in a great position being renters with cash in the bank. Best of luck to you.

According to the e-mail she sent me - "A 10 year fixed SCU mortgage is at 4.750% today..."  SCU is Summit Credit Union.  That's all I know, my friend.  It's public information if you are a Summit Credit Union "customer".

uh oh, Ted Turner better watch out...

My local bank has a 10-year fixed-rate conforming first, no points, for 4.795%

http://lanb.com/rates/mortgage.asp

Eh...don't be so quick. 

Would you spend $400K for a house if it never appreciated (to avoid perpetual rent)?  Could you justify the purchase based entirely on job (and investment) income and not housing gains?  If you're counting on other people paying more in the future, you're joining the same game that is playing out today.