What To Know About Rising Interest Rates

With the 30-year mortgage rate near 4.35-percent, up from last year’s low of 3.3-percent, many homebuyers and sellers are finding it difficult to navigate the newly raising loan waters. Below are some helpful tips for consumers:

• Loans – While loan interest rates may not be at record lows, the bottom line is that rates are still relatively inexpensive. Experts predict that by the end of 2014, interest rates will hover around 4.7-percent and hopefully won’t break the 6-percent mark until 2017.
• Refinances – While the refinance window is beginning to close, homeowners that didn’t have enough home equity to qualify for refinances several years ago, may want to reconsider applying. Recently, housing prices have begun to increase and many lenders are beginning to relax their stringent loan conditions.
• Housing Recovery – The slowly increasing interest rates are not anticipated to hinder the housing recovery. If anything, it may slightly dampen the recovery, but only temporarily. In order to have the housing market be devastated by loan rates, rates would have to substantially increase, which would mean a three-percentage point gain in a very short period of time. Fortunately, experts do not predict this type of economic disaster.
• Lock In – When purchasing a home, consider locking in loan rates for a 45- or 60-day period. If purchasing new construction, it is wise to plan ahead and consider purchasing a 90- or 120-day lock. This helps lock in lower rates, especially when experts predict rates will continue to increase.
• Fixed Loans vs. ARMs – Homeowners should only consider an Adjustable Rate Mortgage (ARM) if they plan on living in the house a short time. If looking for a long-term home, always go with the fixed mortgage, especially in today’s volatile economy.

Loans may be more challenging for real estate investors. Many lenders have instituted rigid guidelines for investment loans. This is due in part to the slow economic recovery and lenders still feeling the post traumatic stress involved in the real estate bubble blowout from 2006.

Fortunately for real estate investors, especially those looking at large-scale residential developments and commercial loans, there are a number of fast loan funding options on the market.

Better Than Loans is a hard money lender that specializes in offering apartment building loans and commercial building loans. They specialize in funding apartment complex from five units to 500, duplexes, triplexes, retail land development, residential building projects, retail centers, mobile home parks, raw land development, residential and commercial mixed use properties, special conversion properties and even gold mines. For real estate investors that are interested in investing in the market before prices once again peak, it is advisable to contact Better Than Loans for detailed investment funding options.