Mortgage Rates......How much is too much?

[jkaetz]

We bought in 2018, locked in a 3.375 rate in 2020, and don't plan on leaving until the kids are out so we should be set to ride through. That said given the current rates and estimated valuation of the house I don't know if we could buy it today.

 

[actaeon277]

If memory serves, my first house mortgage was almost 10.5%. We had to do a 30 year loan to be able to afford the payments. As the rates came down, we refinanced. As my salary went up, we paid extra on the principle. The way the market is now, I don’t know if people starting out today could do that or not.

Yup. My first rate was 9 percent.
So, when I hear crying about how "high" it is...

 

[meyer4589]

I bought my first in 2016, 4.5 rate

 

[Haven]

I just finished a cash out refi of our house. We had refi'ed in 2019 to a 15 year and it was at 2.75%. We are now at a 15 year at 4.75%. The cash out is going back into the house most of it will increase the value of the house.

I lost 2.5 years and almost doubled our rate, but the monthly payment has gone up quite a bit, but not too much.

When we bought the house it was at over 7%, so I am still below that.

 

[Ingomike]

Fewer people will buy houses and turn to rentals. Demand for rentals will go up and supply will go down, raising already hight rents, even more.

And the corporate buyers will be there to buy up the homes…

 

[Denny347]

In Feb, we refinanced our house for a 10yr at 2.99%. That was when then rates bottomed out.

 

[nascarfantoo]

Our first house was financed at 15.3% (if I remember right). One car was financed at nearly 18%. How did we handle it? We just bought small and were very happy there. Didn't need (nor could afford) a 3,000SF house like my kids think they can't live without, and they have only 1 kid max per family. Heck, I bet my nephew's 3 car garage is bigger than our first house.

But it was different times. That first home cost less than many new pick-ups now. We didn't eat out but once every couple of weeks and that was often breakfast because it was cheaper. I drank whatever beer was on sale. Didn't have $1,000 iPhones in every pocket. No home-owners associations wanting $$ to tell someone what color their house can be.

You make it work!

 

[Mark-DuCo]

I certainly don't understand the giant house craze going on. I swear every house around here being built has to be bigger than the last one. I built a simple 1 story berm style house . 3 Bed and 2 bath that is around 1900 sqft + an oversized 1 car garage. I did it for around $135,000. I have a 30 year 5/1 ARM that is at 3.875%. Fixed rate wasn't an option supposedly because my house is an unconventional building style.

I couldn't imagine paying for and cleaning some of these $500,000 mansions going up. I hate cleaning what I have now and it's not that much.

 

[CHCRandy]

And the corporate buyers will be there to buy up the homes…

Yeah, I have a company I am heavily invested in that is doing this a lot, New Residential. They are actually an MREIT, but SFR(Single Family Rentals) is becoming a bigger part of the plan, and something I don't really like. They have been starting to invest in new homes as rentals. They have been buying about 200-250 new houses a month, and now own over 3500 rental homes in 11 states, including Indiana. They have an average cost of $255K per house.....but claim they make 6% more by renting then selling. I just hope they know what they are doing.

I have been thinking about bailing out of them, just because I don't like the rental business, every since Conseco stole my money by getting involved in rental business and trailer loans before going bankrupt.

 

[Ingomike]

Yeah, I have a company I am heavily invested in that is doing this a lot, New Residential. They are actually an MREIT, but SFR(Single Family Rentals) is becoming a bigger part of the plan, and something I don't really like. They have been starting to invest in new homes as rentals. They have been buying about 200-250 new houses a month, and now own over 3500 rental homes in 11 states, including Indiana. They have an average cost of $255K per house.....but claim they make 6% more by renting then selling. I just hope they know what they are doing.

I have been thinking about bailing out of them, just because I don't like the rental business, every since Conseco stole my money by getting involved in rental business and trailer loans before going bankrupt.

The time to bail is getting short IMHO. I believe the institutional corporate buyers are getting to a point they can manipulate the market, which I believe was a goal for them to achieve.