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What do you mean? You’re at 3.6% and can get down under 2.4% that is a no brainer! Might even be able to get a 20 year refi for a few bucks more a month.
Quote:
Originally Posted by himain
We just bought in January at 3.6%. First time home buyers. Don't really think this will help us this soon
Makes me want to buy some old dumpy houses to rent out just to get something to take out a cheap mortgage on. The houses would be an afterthought, the real money would be made with the low rate capital.
You could even overpay and the low rate on the note would eventually off-set paying a little too much on the house.
30 years use of capital at that low rate? Killer inflation hedge.
Makes me want to buy some old dumpy houses to rent out just to get something to take out a cheap mortgage on. The houses would be an afterthought, the real money would be made with the low rate capital.
You could even overpay and the low rate on the note would eventually off-set paying a little too much on the house.
30 years use of capital at that low rate? Killer inflation hedge.
as explained in another post , mortgages are not inflation hedges ...they are loans ... it is the investment that is or isn't the inflation hedge .
with or without a mortgage the investment still will do what it is going to do good or bad . mortgages are neutral to the process , despite the myth surrounding that.
real estate sucks as a hedge in high inflation too ... it plunged as mortgages reached 18% in the 1970's .
it was only when inflation fell that stocks and real estate recovered so both are lousy high inflation hedges while a mortgage is no inflation hedge it is neutral in what it does which is to buy the investment . that invesment may end up being a poor inflation hedge .
Income-producing RE has numerous tax advantages and it can even be structured to live in IRAs.
i have no idea what your post has to do with what i said about neither the real estate or mortgage being a hedge if you expect high to hyper inflation .
just look at my detailed chart of real estate as it was stressed under high inflation through the 1970's .. your chart is looking at it after inflation's back was broken . stocks and bonds did the same thing ... everything only went up after inflation came down .
you cant have anything but a poor real estate market with mortgage rates hitting a high of 18% so under high inflation real estate , bonds and stocks all sucked together so that goes back to my original statement ---REAL ESTATE IS NOT A HIGH INFLATION HEDGE as many believe wrongly. a mortgage is neutral and is not an inflation hedge either ...
the asset does the same whether there is a mortgage or not on it so it is not the mortgage that is any kind of hedge .
Last edited by mathjak107; 07-26-2020 at 08:12 AM..
i have no idea what your post has to do with what i said about neither the real estate or mortgage being a hedge if you expect high to hyper inflation .
just look at my detailed chart of real estate as it was stressed under high inflation through the 1970's .. your chart is looking at it after inflation's back was broken . stocks and bonds did the same thing ... everything only went up after inflation came down .
you cant have anything but a poor real estate market with mortgage rates hitting a high of 18% so under high inflation real estate , bonds and stocks all sucked together so that goes back to my original statement ---REAL ESTATE IS NOT A HIGH INFLATION HEDGE as many believe wrongly. a mortgage is neutral and is not an inflation hedge either ...
the asset does the same whether there is a mortgage or not on it so it is not the mortgage that is any kind of hedge .
TimAZ-
To put this another way, if there is high inflation The Fed will have to raise rates to battle it.
If interest rates go up, logically how would you expect real estate to act relative to other forms of investing?
Granted, I didn't shop around, but my current lender (Freedom Mortgage, which bought out my loan from Veterans United) offered me a 3.25% refinanced rate (down from the 3.75% I had with USAA). This will save me $300 a month, so I jumped at it. There were no closing costs, but I did have to pay $2,500 in VA funding fees, which I added onto the loan.
Sub 3% would have been lovely, but I'm ultimately happy with what I got.
To put this another way, if there is high inflation The Fed will have to raise rates to battle it.
If interest rates go up, logically how would you expect real estate to act relative to other forms of investing?
Will they?
The Fed seems to be concerned first and foremost with preventing a market crash. I don't think we see Fed funds rate rise above 3% again in our lifetimes. It's already been 13 years.
The Fed seems to be concerned first and foremost with preventing a market crash. I don't think we see Fed funds rate rise above 3% again in our lifetimes. It's already been 13 years.
High inflation would dictate they must raise rates.. it is like night follows day ...there is no question that is what happens.. they will only let’s us get a bit over 3% before they reverse course ..that is still low inflation...then comes moderate inflation and finally high and hyper inflation .
So rates going up are a must. The feds most powerful ammonia is raising rates and controlling bank reserves required
Last edited by mathjak107; 07-26-2020 at 10:28 AM..
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