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KHufford
10407 Posts |
 Posted - 07/08/2009 : 12:31:21 PM
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I am putting many people in ARMS these days, are you?
Rates are in the 4's! PLus even if they were to "adjust" they would go DOWN!
Many people that took arm loans out in years back and are underwater that cannot refi are ecstatic that their rates are dropping ...without needing a "loan mod"
Treasury rates are near zero, do you see these ARMS as being risky? Or treasuries will stay low for many years to come?
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katbunk
3630 Posts |
Posted - 07/08/2009 : 1:20:17 PM
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| FHA Arms are very safe as far as I remember since they cap out at what?, 1% per adjustment and 5% life?. I have not done one in a while, (a very long while) but it's a pretty hot product for a first time buyer. |
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clos25
543 Posts |
Posted - 07/08/2009 : 1:24:09 PM
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| ARM are the way to go, 4.25% paying 1 fixed for 5 years? that's crazy not to take it. |
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moquinjm
202 Posts |
Posted - 07/08/2009 : 1:33:29 PM
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| I have been doing quite a few FHA 5/1 arms as well. Actually closed a couple in May @ 3.875% paying 1.5 YSP. Hopefully that will come back! |
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nowbroker
2587 Posts |
Posted - 07/08/2009 : 1:41:47 PM
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quote:
Treasury rates are near zero, do you see these ARMS as being risky? Or treasuries will stay low for many years to come?
Fool's loan IMO. Unless they are going to sell before the adjustment I would not get any low down first time buyer into an FHA ARM.
With the current and projected deficits, what would any logical person think the treasury rates are going to do in the future? They have no place to go but UP big time.
BTW who offers any 5 year fixed FHA at 4.25% with one back? |
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KHufford
10407 Posts |
Posted - 07/08/2009 : 1:44:09 PM
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quote:
Originally posted by nowbroker
quote:
Treasury rates are near zero, do you see these ARMS as being risky? Or treasuries will stay low for many years to come?
Fool's loan IMO. Unless they are going to sell before the adjustment I would not get any low down first time buyer into an FHA ARM.
With the current and projected deficits, what would any logical person think the treasury rates are going to do in the future? They have no place to go but UP big time.
BTW who offers any 5 year fixed FHA at 4.25% with one back?
I think you are wrong....after more thought i realized that if rates did go up in fact...you can always streamline them into a fixed or another arm. FHA doesnt really have risky arms because you can streamline and their caps and adjustments are very moderate.
Even if it adjusted the max 1% it would take 2+ years after the fixed period to increase over todays fixed rates and they would have saved that money over the first 3-5 years already!
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clos25
543 Posts |
Posted - 07/08/2009 : 1:48:29 PM
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quote:
Originally posted by nowbroker
quote:
Treasury rates are near zero, do you see these ARMS as being risky? Or treasuries will stay low for many years to come?
Fool's loan IMO. Unless they are going to sell before the adjustment I would not get any low down first time buyer into an FHA ARM.
With the current and projected deficits, what would any logical person think the treasury rates are going to do in the future? They have no place to go but UP big time.
BTW who offers any 5 year fixed FHA at 4.25% with one back?
There are a few lenders doing them. Worst case scenario it goes up 1 point and that is fixed for the next year, it is still lower than what a 30 year fixed is, not only that but once you are in an FHA loan, it's easy to convert that loan into a thirty down the road if it makes sense, plus how many people do you see that keeps a mortgage for more than 5 years. I've only seen 5 borrowers this year, everyone else keep refinancing their 30 yr into another 30 year. |
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moquinjm
202 Posts |
Posted - 07/08/2009 : 1:50:27 PM
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| Agreed. I have used the ARM as a tool for several borrowers with high ratios to be able to purchase. Always have told them to wait 6 months and discuss streamline options. Especially in today's market of first time homebuyers, how many will really be there beyond 5-7 years? Not many is my guess. |
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TimmyZ1
909 Posts |
Posted - 07/08/2009 : 2:06:28 PM
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| Where are you guys getting these arm rates? I know TBW was that low a couple of months ago but they weren't permitting ysp, Flag and Wells are my investors and rates are only slightly lower than 30 year |
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nowbroker
2587 Posts |
Posted - 07/08/2009 : 2:25:26 PM
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So who has 4.25 with 1 back on a five year fixed?
The rates I see with the lenders I use the 5 year fixed is way too close to a 30 year fixed, so would be a rip off.
I would agree, if they are available with that pricing and rate on a FIVE year fixed they would be a good deal.
The argument on "refinancing into a fixed" is a great one- if rates go up on the ARM, they will be even higher on a fixed rate loan. |
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KHufford
10407 Posts |
Posted - 07/08/2009 : 2:41:25 PM
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quote:
Originally posted by nowbroker
So who has 4.25 with 1 back on a five year fixed?
The rates I see with the lenders I use the 5 year fixed is way too close to a 30 year fixed, so would be a rip off.
I would agree, if they are available with that pricing and rate on a FIVE year fixed they would be a good deal.
I see 3.75% on a 3/1 ARM with 1 back at BofA bro!
Rates have been dropping, some lenders dont price the ARMS well, some are great like BofA.
On the 5/1 its about 4.375 paying 1
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nowbroker
2587 Posts |
Posted - 07/08/2009 : 3:05:03 PM
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Those rates are good. They are buying the market, just like TBW did awhile back. I just looked at 4-5 lender's rate sheets and they are all are at least a full 1% higher in RATE compared to them.
Places like Wells Fargo has a COST of 2.77 at 4.375% on a 5/1 ARM |
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moquinjm
202 Posts |
Posted - 07/08/2009 : 3:09:02 PM
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| Yeah I got my 3.875's @ TBW in May. They were paying 1.5 at that time. |
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