Will the interest rate bubble burst?
I have been in the mortgage profession for over ten years. During that period of time I have seen rates go up and rates go down. I have seen the five year Adjustable Rate mortgage have a higher rate than a thirty year fixed mortgage and I have seen the complete opposite. And one thing that is always asked by almost every client is if I think mortgage interest rates will go down between now and the time they close the deal on that new home. Will the mortgage bubble burst prior to my closing? Will the rates drop and I can get a lower rate? If I knew for sure I would be in Vegas as I am sure someone has a betting line on mortgage rates.First off we need to look at mortgage rates and how it correlates with property in the High Country. Real Estate in the high country is unique. Make a list of locations in the World where people would love to have a second home, Reading, PA, Lansing, MI, how about Salina, UT. I bet not! Breckenridge, Keystone, Vail, Frisco and even Silverthorne are on that list.So with buyers coming in from all over the world to visit, vacation and buy, we have a market that may have a few little drops but the sky’s the limit. Look at prices in Aspen, Beaver Creek and Telluride. So your chances at making a profit in real estate here is much better than most all other places in the World.The next thing to consider is the business of mortgage Investors. These companies are in the business of making deals. If they have no business they cannot make payroll or pay the rent. Plus, you add into that factor that here in the High Country we have deals being made all the time. Most cookie cutter suburbs have much more business in the summer as that is when family’s move up or move out. We have people who want to own for the ski season and others want the homes for the great summers. So we have two seasons of buyers.Now add all of the above up and what do we get? We have a location where people want to own a home. We have mortgage investors who are looking to do deals. We have a finite supply of properties and we have a great outlook for values here in the High Country. Plus as other markets slow down we still have buyers and lenders sharpen their pencils to make a deal. And what if the rates do go up an eighth of a percent? For every $100,000.00 borrowed that adds up to only $8.06 cents a month, that’s all of $96.72 a year. All for a piece of real estate that buyers seek out from all over the world! Buy that home while rates are at six percent, seven percent or even eight percent. It will pay off in the long run, and I bet the short run too! For answers to your mortgage related questions call Bob Kieber at (970) 262-1199 or e-mail him at email@example.com.Bob is a local mortgage lender and principal of Resort Lending. He has 30-plus years of professional experience in real estate, finance and investments, and is a longtime resident of the High Country.
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