Lock in fixed
interest rates for your mountain vacation home.
With interest rates rising what is the best way to finance your mountain
vacation home? Creative financing has help millions purchase second homes
they may not have been otherwise able to afford. But now what is the
safest bet for your investment? Prices are still climbing in mountain
homes of the Blue Ridge Mountains. There is no sign of leveling off or
dropping. So there are many good mountain land investments out there
but what is the wisest way to invest? No one can predict the future.
Best bet? Get a fixed interest rate and forget the trends of the past
few years.
The
Rate Debate Rages On.
The 10 year US Treasury Bond rate dropped on news of high consumer
confidence. Why is this relevant to mortgage holders? Mortgages with
low front end rates that adjust later are pegged to short term rates.
Fixed rate, longer term mortgages with maturities of 15 or 30 years
have rates that will stay the same for the life of the mortgage.
The debate on rates center on two questions: will the Fed continue
to raise short term rates? and will long term rates move up to create
a more "normal" yield curve where longer term maturities
trade at a higher rate than short term maturities?
In typical Wall Street counterintuitive fashion, good news for the
economy means bad news for the bond. Higher consumer confidence portends
higher rates. The 10 year bond falling on this news -- i.e., long
term rates going up, puts pressure on long term mortgage costs. Short
term rates went up on the news also. This puts pressure on short
term mortgage costs. If today's market action continues, it will
get more expensive for homeowners to finance long term and short
term. If you already have a fixed rate mortgage, you are fine but
if you have an adjustable, you might feel some upward rate pressure
on your next adjustment and consider refinancing to a fixed rate
mortgage.
Wall Street is fickle and what goes up today may come down just
as hard tomorrow. For homeowners, the only way to exit the great
rate debate is to lock in a long term mortgage which still trades
at historically low rates. Your trade off is the comfort for certainty
vs. the prospect of sharing in the benefit of lower rates, should
the Fed indeed decide that they are done...for now. Will rates continue
to go up? Or will they fall? No one knows for sure, not even Wall
Street.
Article by Edward Wong.
Buyer's Agent a better choice!
The Listing Agent, unless specifically disclosed
otherwise, represents the seller in any transaction for the sale of
a home. It is that
Agent's fiduciary duty to protect the
seller's position at all times. No matter what they tell you their
loyalty will lie with their selling clients. That is why you want an
agent with experience like Gary
Ward to represent YOUR interest as a buyers agent when buying
a home.
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