Home Buying in Brooklyn>Question Details

Rhayward, Home Buyer in Brooklyn, NY

What happens to me if my interest rates decrease and I have a fixed rate loan? Sounds scary. Am I wrong?

Asked by Rhayward, Brooklyn, NY Thu Mar 7, 2013

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Michael Denniston’s answer
Rhayward, forgive me if I'm not clear on your question. As my colleagues have stated,your interest rate cannot change for the entire term of a fixed-rate mortgage. So the rate you lock and close at is the rate that you will have until you've paid off the loan. Now, if you've locked your rate, but haven't closed yet and rates have declined, you should ask your loan officer if they have a float down option. This will allow you to take advantage of declining interest rates. But not all lenders offer this option. My bank does. For more information or assistance, I can be reached directly at 917.699.0183.

I value your feedback, so please hit the thumbs up if my reply was helpful. All the best.

Michael Denniston l Cell: (917) 699-0183
Residential Home Funding, Corp.
Licensed Mortgage Loan Originator l Sales Manager
6901 Jericho Turnpike Ste. 219 | Syosset, NY 11791
Main: (516) 605-1733 | Fax: (888) 881-2557
NMLS # 24076 | Company NMLS # 34973
Mdenniston@RHFunding.com
http://www.rhfunding.com
.
1 vote Thank Flag Link Sun Mar 10, 2013
BEST ANSWER
I thought about your question more and I think you are afraid that the rates will decrease AFTER you have locked in on a fixed rate and you will regret having locked. Many of us agents are buyers and sellers just like the non-agent members of trulia and face the same dilemmas. I've purchased several homes in the past few years and I'm not a big risk taker on rates. A lot depends on the type of person you are. When they look good, I lock and if it goes up, i decide whether or not I want to buy it back down again. I have already refinanced a few of the places that I bought less than two years ago because the rates went down. It cost money but when you are at the beginning of your loan, you are not starting the clock all over again on payments and I'll break even in a year or so. If you think about it, anything below 4% is really great. If you want to risk it, then start watching the economy for indicators and have a great lender who will check in with you on a daily basis early afternoon like i did! Good luck
1 vote Thank Flag Link Fri Mar 8, 2013
Helpful- thanks!
Flag Mon Mar 11, 2013
Hi,

If you have already closed on the loan, a fixed rate is just that, fixed. It will not change even if the market rate goes up or down. If you have not closed yet, and are locked in to a rate, you may still get the benefit of rates going down depending on the policy of your lender.

Michael Richman
Licensed Real Estate Associate Broker
KIAN Realty
450 7th Avenue Suite 1501
New York, NY 10123
212-757-8268 x220
917-991-2528
mrichman@kianrealtynyc.com
http://www.kianrealtynyc.com
1 vote Thank Flag Link Sat Mar 9, 2013
If interest rates decrease, you can always refinance; Several banks have promotions where they charge you nominal fees to refinance and its a win-win situation for everyone. Valley National has a promotion, please check the link below for details.
0 votes Thank Flag Link Sat Mar 9, 2013
The bank makes more money off your loan than they do off the lower paying loans.
0 votes Thank Flag Link Fri Mar 8, 2013
Rhayward:

Do you already have a mortgage or are you trying to apply for one?

Sincerely,
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783
Email: MitchellSFeldman@aol.com
0 votes Thank Flag Link Thu Mar 7, 2013
Not sure about this question. If you have a fixed rate loan already and rates either go up or down, it will not change the rate you have on the existing loan. If you're in the process of obtaining a loan, and have not yet locked your interest rate, then any movement in rates will have a direct impact on the rate you'll ultimately commit to. If you're in the process of obtaining your loan, and you have already locked your interest rate, then any movement on rates (either up or down) will only h e an impact you the rate lock expired and you have not yet closed on your loan.

Javier Meneses
Senior Loan Officer
NMLS #23130
STERLING NATIONAL BANK
310 Crossways Park Drive
Woodbury, NY 11797
jmeneses@snb.com
(516) 606-9648
0 votes Thank Flag Link Thu Mar 7, 2013
Fixed rate loans don't increase/decrease, therefore you may wish to contact your lender with any questions you may have...
0 votes Thank Flag Link Thu Mar 7, 2013
Fixed rates are fixed. You may be thinking about the tax or home owners insurance portion of your mortgage payment, which can fluctuate. Most mortgage payments consist of Principle, Interest, Taxes, and Insurance (PITI). Your principle (amount of the loan) should go down with each payment. Your interest should stay the same (if it's fixed). Your tax and insurance portion depend on those particular costs and can change. If your assessed amount for your home decreases, then your taxes may go down and so will your payment. If you have specific questions that require more detail, consult with your mortgage company. If you have a fixed rate that you think may be high and should go down, consult a lender or call your agent and ask them to refer a lender to you.
0 votes Thank Flag Link Thu Mar 7, 2013
Interest rates do not decrease on a fixed rate loan. They also do not increase.
0 votes Thank Flag Link Thu Mar 7, 2013
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