Mortgage refinance rates in the VI

@VIpirate 

Yes it was for a 30 year fixed rate. I paid for the max amount of points for about 8k. Normally the more points you buy the more it costs. For some reason I’m this case the more points we got the cheaper it ended up being per point. With the points the monthly payments would have been $400-$500 lower. Good investment for sure. 

That said the appraisal came in lower then the sales price. Seller wouldn’t budge so we terminated the contract. In my opinion that was a big mistake on their end, and blessing for us. All signs are indicating a crash in the housing market. Within a year property values may be 20% lower than today and with larger inventories. It won’t be a sellers market anymore. However interest rates may be 8% then as well. Maybe it won’t have an intact here due to it being a little different here. 

For a house at $500,000 every 1% increase in interest rates is an increase of $314 a month. 

Thats $1,256 more a month from a 2% interest rate to a 6% interest rate.

I’m guessing there will not be that much of an impact of the wealthier homes, but it will impact middle class buyers. They won’t even qualify for houses that they once did. 

That’s my opinion lol  

I'm closing on my refinance in a couple of days and I hope you didn't get the same shitty appriaser I did.  In the VI I know it's hard to get comparables but when the house next to me sold for 648k in March with 200 sq ft more space and no solar or accordian hurricane shutters, and my appraisal was much less and based on homes nearer to christiansted in lesser desired areas, and not use the house that's 300 yards away from me, I was a little pissed to and feel this guy should not be doing appraisals in the VI.  

Just drinking my morning coffee hope that made sense lol

I think appraisal issues are pretty universal and especially in USVI.  My daughter re-financed about 6-months ago on the mainland and first appraisal was $765K despite near term comps on her street significantly higher.  She appealed the appraisal to no avail and was forced to got to another mortgage provider and a new appraisal 2 weeks later was $980K, and she was able to re-finance just before the rates shot up.   

I think 2022 is going to have begun with a red hot real estate market and end with one that is in a coma.  There’s simply no demographic that benefits from the combination of high interest rates, inflation and gas prices that are 2X what they were 18 months ago.  Fear is the result, even if I’m a cash buyer, if I think waiting a year or two will save me $100K (or more) I’m going to sit on the sidelines, or lowball on any offer I might make.  I’m estimating we see mortgage rates above 8% by years end.  2023 could see some interesting opportunities for buyers with cash.

If I’m an appraiser, I’m being a little more cautious than I might have been earlier this year.  We’re at a tipping point as I see it.

In the news today. Mortgage demand drops to a 22-year low as higher interest rates and inflation crush homebuyers. Fed expected to have the highest increase in decades.