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I struggled too when we locked our rate at 4.5%.
Just put it in perspective. Our first house was a 5.75% rate in 2004 and that was good. Many years ago people had 6-7% interest rates. 4.x% is a good rate - though I know it's annoying when rates rise and you can't do anything
When I applied for my FHA, the average rate for a 620 credit score in Tennessee was 5.25% That was back in December. Due to the increase in rates in the bond market, we are seeing an increase in mortgage rates as well. Since December, I only saw interest rates dip ONCE, they have been increasing since this summer I believe. When I closed on my house last week, the Tennessee average for a 620 credit score was 5.39%. Today is Feb 4 and the average for a 620 credit score is now 5.536%. So you can have great credit but depending on when and where you decide to look for house, you are at the mercy of the bond market and increasing rates.
First house I bought the rate was 9.75%
Rates might have been higher back than but cost of housing vs income was lower so people could handle higher rates. I live were the cost of housing is going up 15-20% a year the past few years and with higher rates added to that it's becoming more and more difficult for even people with good jobs to buy any think. We have a bachelors and a master's and only 9% of income towards debt and we are struggling to get a no frills older condo. Even with saving 3k a month we can't catch up to the raising prices or rates. This is crazy.
wrote:Rates might have been higher back than but cost of housing vs income was lower so people could handle higher rates. I live were the cost of housing is going up 15-20% a year the past few years and with higher rates added to that it's becoming more and more difficult for even people with good jobs to buy any think. We have a bachelors and a master's and only 9% of income towards debt and we are struggling to get a no frills older condo. Even with saving 3k a month we can't catch up to the raising prices or rates. This is crazy.
It feels like a bubble. My 2020 prediction says that people will wish that they had remembered 2008. "Shoulda used that 2020 vision" will be the joke to help ease the pain. Could be wrong, and buying at peak only really matters if someone is over extended, or has large emergency. But...
In the same boat! 721 and I'm right under 5% (I also am putting down a lower amount of $$)...my loan officer said it's just the market right now *eye roll*
My parents said to look into re-fi within the next few years, and that's what I'll do.
This sucks! I am doing a new construction as well - when i was preapproved in November 2017 with a 783 mid score, my rates were quoted at 3.75% - 4%....now watching them rise as a wait to do a rate lock for end of April close date is nerve wrecking....
Does anyone have pros/cons of maybe doing an ARM and then refi before the initial period is up? In my novice mortgage brain, I see at least being able to get a lower rate to start and then refi when rates get better????
wrote:In the same boat! 721 and I'm right under 5% (I also am putting down a lower amount of $$)...my loan officer said it's just the market right now *eye roll*
My parents said to look into re-fi within the next few years, and that's what I'll do.
That is the market right now... Market in 5 years could be in the 7% or 8%. Be glad you're still under 5%. I pre-approved someone who had a 701 score at 4.875%. Market rate for that score is at 4.625%. I did that because I don't know when he'll find a home and if rates increase, he's covered by that extra bump.