CONSIDER ALTERNATIVE LOCATIONS Gone are the days of 2.5% interest rates, seemingly overnight. In addition to higher rates, you may also have the downward pressures of reduced down payments as your investment capital in the stock market seems to be shrinking daily.
CONSIDER ADJUSTABLE-RATE MORTGAGES The main tip for purchasing in a market with increasing interest rates is to think creatively. Whether you need a special adjustable-rate mortgage (ARM) with a 5-year or 10- year balloon or to find a lender who will lock in a rate while you shop around, the most important thing is your real estate purchasing goal. Partnering with someone who can help you achieve your goals faster is also a good option.
So, what should investors focus on in the near future?
If your goals are to secure long-term lending, ARMs are out.
• Assess your current portfolio. With the recent hyperinflation, you have likely seen significant increases in the value of your properties. Can you reduce your risk or increase your earnings by selling an asset to acquire a more profitable or less risky one? • Consider alternative locations. Formerly stable areas of the country are experiencing hypergrowth in both population and prices. There are value deals in smaller, growing metro areas which you may have never previously considered. • Focus on the long-term. Rents in the US have risen annually at a rate of 8.86% per year since 1980, continuing to march forward through variances in interest rates during those 42 years.
If you are looking to buy, build equity and sell, an ARM is an option.
Banks with portfolio loan options are better than most. They just need to kick up your loan to a senior officer to get the rate and deal you need to make it work. With interest rates rising, banks and institutions are trying to be more flexible.
WITH INTEREST RATES RISING, BANKS AND INSTITUTIONS ARE TRYING TO BE MORE FLEXIBLE.
Robert Ward eXp Realty Arizona Connect with Robert
Elizabeth Campbell Lysi Bishop Real Estate Boise, ID Connect with Elizabeth
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