April 9, 2009

FLASH: And now a word from the Financial Advisor in Chief - REFI NOW!

What he says is true. If you intend to keep making payments on your home, you'd be a fool not to refi at these government-manipulated 4% interest rates.

And hell, if you're looking to buy a home, and the P/E is good and it cash flows and you have 20% down, 4% is pretty tasty.

But you'd also probably be a fool to keep paying on a home that's worth 50% less than your mortgage. And you'd be a fool to buy in a market that still needs to correct 20% or more.

What do you say folks? Is 4% (as predicted here) enough of an incentive to buy? And anyone refinancing while the getting is good?

But you better hurry. Interest rates will be 14% soon enough.

It hath been foretold.

"The main message we want to send today is there are 7 to 9 million people across the country who right now could be taking advantage of lower mortgage rates," Obama said in a photo opportunity in the Roosevelt Room. "That is money in their pocket."

26 comments:

gregoryw said...

14% interest would be a god send. Like the boomers before us, you can refi your way out of interest. But you can't refi your way out of principal. Buying at 4% and selling to someone at 8% is a suicide mission.

14% interest rates and house prices would be under $100,000 again, everywhere.

Realist said...

Keefer I’m not sure.

I can tell you that for the past 9-10 years when we hear someone with a European accent; reporting news or political commentary or financial discussions;
we immediately know that whatever the person is saying has zero credibility.

It is fake..

Everything, everything Europeans say are lies. Period..


I listen to Bloomberg radio on my way home from work; am gonna agree that majority of ‘financial experts’ on there don’t know anymore then the typical person on the street, but when we hear a ‘financial expert’ with a European accent, it is clear - for sure - 100% that what this person is saying is the opposite of fact, not true and different then reality, it is as if they are conditioned to lie since kindergarten.

Nuff said..

JAWS said...

No, 4% is not money in your pocket, no matter how you look at it.

I'm not doing one stinking thing. BBQ, wine, Idol and Dancing.

I can't believe this president said that.

I'm all for higher interest rates.

bank dick said...

How many of those California and Florida alt-A jumbos have any equity? LOL, the vast majority are so far under water it wouldn't matter if the interest rate offered was 0%, they will never qualify for refinancing.

So what's next, a program where the feds force the banks to do a short sale so these people can refi? Ninja loans for alt-A jobless FB's so they can refi?

It will be an interesting Summer - right before the biggest market and financial crash in history.

Anonymous said...

When interest rates spike later this year, and metal prices go to the Moon in the ensuing panic, people who hold low interest rate mortgages will see a unique opportunity. The people holding their notes will come begging to get them paid off. I expect they'll offer discounts of 20% for mortgages at 6% or less. When that call comes, I'll cash in a couple of bags of junk silver I bought in 2003 and pay off my note.

Whoohoo!

Nimesh said...

Sure they can refi for now, but what will they do when the Bond Bubble (and yes Virginia, it is a bubble just like the real estate bubble) bursts and interest rates go through the roof? Face it, if you bought a home in the last seven years, you are SCREWED. Your best option is to walk away and do what is in your best interests.

But there are too many people who will "wait it out"; much to their financial detriment. I have a coworker who bought an English Tudor house for 380K and he still believes it has gone up in value while a quick check at realtor.com or an mls would tell him that similar properties are now selling for 250K. I asked him if he would walk away if similar properties would sell for 200K and his reply was "are you kidding me? I love that house, I love it, I wouldn't walk away because real estate always goes up".

Anonymous said...

Anonymous Realist said...

Keefer I’m not sure.

I can tell you that for the past 9-10 years when we hear someone with a European accent; reporting news or political commentary or financial discussions;
we immediately know that whatever the person is saying has zero credibility.

It is fake..

Everything, everything Europeans say are lies. Period..


I listen to Bloomberg radio on my way home from work; am gonna agree that majority of ‘financial experts’ on there don’t know anymore then the typical person on the street, but when we hear a ‘financial expert’ with a European accent, it is clear - for sure - 100% that what this person is saying is the opposite of fact, not true and different then reality, it is as if they are conditioned to lie since kindergarten.

Nuff said..

April 9, 2009 8:51 PM

Sir or Madam, may I ask you what is it with you and your absolute hatred for Europeans? Hating people and making broad stereotypes about Europeans is about as irrational as people who make broad stereotypes about us Americans. Neither of which is logical yet you continue on your banter about

Anonymous said...

as someone around here says

gimme cheese...

Anonymous said...

Sorry Mister Prez.

Interest of any kind is not money in our pockets. Rather it is money in the BANKERS pockets.

But then you already knew that didn't you.

Mitesh Damania said...

It's better to have a low principal and high interest rates. That way you can pay it off in cash later on.

Stuck in So Pa said...

My relative in banking summed it up very simply. In the county/state where he works, he said that less than one in twenty-five applicants get approved for refi. The average sh*tbox used for collateral has simply lost that much value. No amount of lower interest rates will help you if you can't get approved!

To those who CAN get refi'ed at a lower rate, when the interest rates rise (as they most assuredly will,) I think that the banks will be offering these lucky sob's the moon in the way of perks, principle reductions, and other goodies to let the bank off the hook.

Time will tell.

Anonymous said...

i see strings of 20,000 2 bdr condos????????????/ hell at those prices 20 percent interest rates are meaningless

Anonymous said...

Boy, I really hate to hear the crap coming out of Mr. Bojangle's mouth these days.

Maybe not such a bad idea if someone decides to shut him up for a while.

Just sayin'.

Anonymous said...

Is it time to refinance those rental properties or are you still going to be upside down with those falling rent price.

You could always wait to see if interest rate will fall to 4.2 price by year end.

http://www.sfexaminer.com/local
/Bay-Area-rents-fall-more-
than-any-US-region-42651787.html

Bay Area rents fall more than any U.S. region

Residential rents dropped more in the Bay Area during the first quarter of 2009 than anywhere else in the United States, Reuters reported Tuesday.

The average effective rent — a figure that factors in concessions such as a month of free rent — fell by 2.8 percent to $1,775 per month in the San Francisco area, Reuters reported.

Rents are still sliding as vacancies and unemployment continue to rise in The City, according to San Francisco Apartments Association Executive Director Janan New

danm said...

I think what people fail to realize is that this refi opportunity is a gift to those who have been fiscally responsible.

When the SHTF and rates go to 14%, they'll be the ones laughing!

Anonymous said...

Why are you people buying into this bull$hit that you can get a 4% rate? Here's why:

1. Need spotless credit report
2. Pay points upfront
3. High Fees (especially Fannie)
4. Closing costs
5. Good luck finding honest broker

4% is just a teaser to fool morons, nothing else. Once you pay all the above, your REAL rate will skyrocket from 5.5% to 6%.

Stuck in So Pa said...

Anonymous said...
Why are you people buying into this bull$hit that you can get a 4% rate? Here's why:

1. Need spotless credit report
2. Pay points upfront
3. High Fees (especially Fannie)
4. Closing costs
5. Good luck finding honest broker

4% is just a teaser to fool morons, nothing else. Once you pay all the above, your REAL rate will skyrocket from 5.5% to 6%.
============================
Years ago I bought my first home (1974) with a 6.25% 30 year with 20% down.

It felt real good in 1979 to take out a $10,000 tax deferred annuity CD at 17.9%with the local bank (ten years at 17.9% with an additional 5 years at min of 10%, Thank you Chairman Volker.)

Let that teaser rate "skyrocket" to a high(?) of 6%. If you can get it, go for it! When
those interest rates go through the roof, and they will, you will be laughing all the way, well "to the bank!"

Anonymous said...

There is a sweet spot in all this, if you are a kid there are more place to party.

http://abcnews.go.com/Business
/Economy/story?id=6999539&page=1

Kids Party in Foreclosed Homes, Leave Wake of Vandalism
Party-Throwing Minors, Criminals Make Themselves at Home in Vacant Houses

Anonymous said...

How can you tell which house is going to be the next party house.

It should not be to hard to find.
1 in 9 homes sit empty.

http://www.usnews.com/blogs
/the-home-front/2009/04/10/record-
1-in-9-homes-vacant-census-bureau-
says.html

The white notice taped to the front window of a luxury home in the Vasaro subdivision is a telltale sign.

"Bank-owned," says real estate agent John Groves, without skipping a beat.

Anonymous said...

Is it time to renegotiate your rent.

http://online.wsj.com/article
/SB123914803759899081.html

The nation's apartment market deteriorated in the first quarter as rising unemployment dashed landlords' hopes that the housing downturn would create a soft landing by bringing former homeowners back as renters.

The vacancy rate for the top 79 U.S. markets jumped to an average 7.2%, a full percentage point increase over the past two quarters and the highest level since the first quarter of 2004, according to statistics from Reis Inc., a New York real-estate-research firm.

The jump in vacancies came even as landlords reduced rents.

Anonymous said...

Will falling rent price, hurt recent landlords who speculated on recent falling house price to get in.

http://www.latimes.com/business
/la-fi-apts8-
2009apr08,0,4736812.story

The average rent in Los Angeles County fell almost 4% in 2008 as apartment occupancy rates dropped and new units came online.

The decline should continue this year as more renters lose their jobs, according to the annual USC Casden Forecast expected to be released by the university today.

To keep their units occupied, some landlords are lowering rents or offering concessions for signing a lease, such as a month of free rent or a reduced deposit

Anonymous said...

Will reduced apartment rental price cause a feedback loop, causing home rental price to drop, as more renters worried about lay off look for rental bargain to increase their saving reserve.

http://www.lasvegassun.com
/news/2009/apr/10/foreclosed-
vacant-homes-pressure-apartment-
rents/

When the foreclosure crisis hit Las Vegas, many expected apartment-complex owners to be the beneficiaries because those out-on-the-street homeowners needed to live somewhere.

But the reality is that the shadow rental market of homes and condominiums continues to put pressure on apartment-complex owners, whose vacancies are increasing. They must offer incentives and cut rents to lure tenants.

Anonymous said...

Did you remember the rent price are suppose to fall, when you speculated on that short sell house that you though would make a great rental.

http://www.charlotteobserver.com
/business/story/650631.html

The average apartment rent in the Charlotte area fell during the past six months for the first time since 2005.

That's a concern for apartment landlords in a market plagued by job insecurity, a rising supply of units and growing competition from condo and single-family owners unable to sell their dwellings.

The vacancy rate rose to 11.8 percent in February from 9.1 percent in August and likely will go higher as 6,000 apartment units are completed,

Anonymous said...

Do you think apartment price will fall in Manhattan.

http://www.businessweek.com
/lifestyle/content/apr2009
/bw2009049_117648.htm

It's Now a Renter's Market

Across the U.S., desperate landlords are coming up with novel ways to attract new tenants and retain old ones

For years, rising rents in Manhattan were thought to be as inevitable as baseball at Yankee Stadium. But times change, and in New York, landlords are scrambling to hold on to renters who have been hit by the economic downturn.

That means renters who, like Gips, are still in good financial shape now have the whiphand. "I was thinking that the rent was so high that there was no way I'd consider staying," says Gips. "Now that they've offered the reduction on their own, I kind of feel I should do a bit of negotiation."

Anonymous said...

Did you calculated a 35% drop in rent price in your debt to earning ratio calculation when you recently brought that rental property.

http://www.forbes.com/feeds
/afx/2009/04/07/afx6266619.html

Manhattan rents slide down- Cushman

Manhattan's overall vacancy rate in the first quarter rose 3.5 percentage points to 9.6 percent, the highest level since the third quarter of 2005, according to Cushman & Wakefield's report released on Tuesday.

Vacancy could rise to about 12 percent if the economic downturn continues to deepen, said Joseph Harbert, chief operating officer of Cushman & Wakefield's New York Metro Region, and rents could fall 35 percent from their peak in the third quarter of 2008 by the end of the year.

Anonymous said...

Two more banks made it on the FDIC failed bank list. That make 23 banks so far this year.

http://www.fdic.gov/bank/
individual/failed/banklist.html

New Frontier Bank, Greeley, CO
Cape Fear Bank, Wilmington, NC