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One Thing You Must Know About Rates

 There is a lot of talk lately about how interest rates have risen slightly over the last month.  Some people start to panic when rates begin to rise because they think it is all bad news but there are two sides to every story.

The lowest rate certainly sounds best. But did you know the lowest rate doesn’t always mean the lowest cost?

Mortgage interest is just one component of the real cost of owning a home.

Interest rates are a reflection of expectations for inflation and the supply/demand equation for money. Rising rates typically mean rising inflation, too.

When inflation occurs, the value of your home will typically rise. You can subtract that increase in value from the interest you pay for a better gauge of the real cost of owning.

The opposite is true too. If rates are low and inflation is absent, values stagnate or even drop, potentially adding to your real cost.

In simple terms, a low rate and no appreciation can be more costly than a higher rate with appreciation. Recently, the markets have provided for both low rates AND rising prices so now is definitely a great time to buy or sell depending on your situation.

If you’re ready to take advantage of conditions that may not last or just want to learn more, please feel free to contact Dan Longman with Priority Lending Corp at 954-438-3776 or email prioritydan@bellsouth.net . Also check us out online at www.prioritylendingcorp.com 

 

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