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Naomi Said:

Bank rates when down, how long should I wait b4 checking on refi a mortgage. Should I check right away?

We Answered:

If you like the current loan, by all means call the bank you currently have a loan with. There are many different places to check out current rates for mortgages Just be careful and look at the points the lenders charge for those rates. You might think a lender has a good rate, but it is because you will be paying a lot up front for that rate. It pays to shop around. Good luck.

Tony Said:

are mortgage bank rates going up, y if they are. life a struggle?

We Answered:

Yes, life is a struggle. Nothing new there.

Regina Said:

What you think that Bank Mortgage rates will stay lower as now for long term?

We Answered:

Yes, rates remain somewhat low historically speaking. No, mortgage rates have nothing to do with the Fed Funds rate.
No, low interest rates are not to blame for people loosing their homes. Greed, timebomb loans and irresponsible borrowing and lending, declining markets and fraudulent appraisals were the real culprits. This is the perfect storm for a mortgage crisis.

Banks make there money when they originate loans (junk fees), sell the loans to FNMA and FHLMC (gain on the sale by originating at premium rates) and through servicing income (they make 0.25% per year for processing payments and performing various other admin tasks on the loans the originate.

They do not generally hold the paper as they would be exposed the the interest rate risk that caused the S&L crisis 20 years ago. That is, if you originate a loan at 6% and rates go to 7%, your 6% mortgage would be worth less than the face amount as it would have to be sold to yield 7%. It may lose as much as 10% of its value. That would errode a banks capital like nothing else and could lead to its insolvency which would threaten the deposit insurance fund.

What rates will do in the future is pure speculation. Some market analyst are calling for the 10 year bond yields to fall by the end of the year. If that happens, the required net yields on the mortgage back securities in the secondary market(which drives what rates banks can afford to offer in the retail/primary mortgage market) should fall as well.

With that being said, my finance professor told me that we, as consumers, should not speculate about what will happen with interest rates. That is, if you need to borrow and you find a rate that you like, you should take it because it may not be there tomorrow. How true that wisdom rang this January when rates dipped to about 5.375% on a 30 year for about 6 hours before they shot back up 0.5% when the stock market started its recover.

Who is really loosing money? The people who insure the loans that are going in to default; the FHA, VA and the PMI companies and some of these other companies that supposedly insured the uninsurable loans called non-prime/sub-prime loans (these companies could not possiblly have charged enough to cover the losses on the loans they insured so they are largely bankrupt) and everyone who had investments in companies that bought into these pools of sub-prime loans.

Between the diminished home equity and actual losses due to defaults, I believe the that the actual losses will be around 2 trillion dollars by the time the crisis is really over.

All those people who talk about Bears Stern being a watershed are clueless about the liabilities that Countrywide has failed to recoginize. I think there could be hundreds of billions that will be scuttled if the merger with Bank of America goes through. Another back room deal in the making in the name of the governments "too big to fail" doctrine.

Manuel Said:

What exactly does this rate cut mean? Does it lower mortgage rates? Bank rates?

We Answered:

Savings and CDs will drop downward, maybe as early as tomorrow, or be lagged through the first week of November.

Mortgage rates probably won't be affected much.

The rate is lowered for banks to loan each other money, and for banks to borrow from the Fed itself.

Tonya Said:

I have a mortgage I want to refinance to get the new lower rates. Which bank should I go to?

We Answered:

Your best bet is to work with a mortgage banker/broker. The problem with going with a bank is its like going to McDonalds, you'll only get their programs and rates. If you use a broker you now have access to multiple lender/programs and you a person shopping around for the best rates and terms. Here is an example.
I just closed a client who went to Countrywide first. CW wanted the client to pay off over $16,000.00 in old collections before they would close a loan. I was able to get them the same FHA loan without having to pay all of that old debt of and saved them $16,000.

Olga Said:

sites that compare bank mortgage rates?

We Answered:

try www.bankrate.com

Victoria Said:

Why are bank mortgage rates always higher than credit unions?

We Answered:

Credit Unions are owned by their members and don't have to make a profit. While it's not always true, a Credit union will often have better interest rates on savings also.

Hope this helps.