OT - interest rates

[sawxfan23]

I think the posters on the Boneyard are smarter than a stinky calculator

Or at least we think we are!

 

[stamfordhusky]

I would think so, but don't ask me to prove it.

When we first financed in '88 my wife tells me the rate was just over 9% and supposed to go up to 11% shortly thereafter. However, this was the time of the S&L bubble bursting, and also my wife embarked on a new career with the local (since merged into a national) bank, which enabled us to re-fi to a significantly lower rate, with a 1% extra decrease due to her employment, so it went up when she left the bank after around 10 years. Don't remember the actual rate, maybe 6-7%?

Here are the historic mortgage rates by month for the past 43 years: http://www.freddiemac.com/pmms/pmms30.htm

Just after the Jimmy Carter years, mortgage rates topped out at over 18%. Average in 1988 was still 10.3% They were around 7.5% in the earlier 1970's. Pror to the Vietnam war, rates for decades were fairly steady at 5-6%.

 

[FairView]

I remember the good old days -- just out of college, no money, no credit cards, but you could get yourself a loan for a few days by writing a check for cash and playing the float. We even knew which supermarkets took the longest to clear checks.

Regarding interest, my first house in 1987 had a three-year variable 30-year note at 8.6%. After three years it was 10.6%. I refinanced my current house in February 2013 for 15 years at 2.75 fixed.

 

[cockhrnleghrn]

is refinancing good say from 6.5 to 4.5%... is it worth it?

The general rule of thumb is that if you save at least 2% on the rate it is worth it. There are other considerations, too, like origination fees and other closing costs. I'm a sr. vp of lending if you want to PM and specific questions.

 

[cockhrnleghrn]

Isn't closing cost just as much as the difference in monthly payments... Guess that's why length of living there matters eh?

If you're going to move in the next 2 or 3 years it won't be worth refinancing. The loan amount is also relevant.

Another possibility is to find a credit union or bank in your area that pays the closing costs and may have an intro rate on a Home Equity Line of Credit. Where I work we pay all closing costs on HELOCs and have a 2.9% rate for a year before the rate goes to Prime + 1%. If you can pay it off in a couple of years, something like that would be a great option.

 

[KnightBridgeAZ]

Here are the historic mortgage rates by month for the past 43 years: http://www.freddiemac.com/pmms/pmms30.htm

Just after the Jimmy Carter years, mortgage rates topped out at over 18%. Average in 1988 was still 10.3% They were around 7.5% in the earlier 1970's. Pror to the Vietnam war, rates for decades were fairly steady at 5-6%.

Thanks, that was fascinating. As I suspected, our rates were decent for each time.