How low will interest rates go?

General Real Estate Investing
1

How low do you predict the interest rates will go? I’ve seen as low as 4.75 with 0 points today. What is the lowest you’ve seen and how low do you predict them to go and what date before they start going back up??

http://www.crikey.com.au/Business/20081210-Interest-rates-how-low-can-they-go.html

2

Anybody?? I’m about to submit a loan application so it would be helpful to know if I should do it now for 4.75% 15yr fixed conventional or if I should wait…

3

Depends what kind of loan you are applying for. Commercial Mortgage?

4

At 4.75%, I don’t think that it is worth waiting for any interest rate drops, as whatever drops that come will only be marginal in your payment/interest.

The outlook is that in Jan, rates will be at 4.50 or so for a 30 yr fixed residential mortgage. I’ve also heard rumors that rates could go as low as 3.5% next year, but I believe that may be pushing it a bit.

Raj

5

I submitted my loan app today and locked in the rate…Can I change that by waiving the application fee or by applying for a new refi? I got the rate locked in at 4.75% but if rates DO go to 3.5-4, it may be worth waiting…

6

ballgum,

I don’t know the amount of the loan or terms, which is important in the consideration.

You’ll have to talk to your loan officer concerning a change, but usually a rate lock prevents your rate from going up, not down.

As far as waiting to get the loan, again, the how’s and why’s are important there. Is it worth waiting for a .25-1% drop in interest? Is so, how long is it worth waiting for in order to get that rate?

There is really no way to try to guess the bottom of a rate drop. There are simply too many variables that affect mortgage rates to say that they will continue to drop. And personally, IF we see sub 4% interest rates, it will not be any time in the near future, in my opinion.

Some food for thought. At 4.75%, 30 years a monthly payment would be approx $522/month. At 4%, the monthly would be approx 508, or $14/month difference.

Raj

7

ballgum,

I would lock that rate! Any less than that is just a gamble. It’s a terrific rate.

I’m looking to re-fi here to get rid of an 8.8% equity loan. I’m shooting for a 5% FHA loan as I can put the last of my credit card rehab debt in on the loan. It will save me almost $2500/first year in interest.

Furnishedowner