50 Years Later: Interest Rates

Interest rates are the absolute best tool for enabling your home to also serve as an economic investment. Why?

Originally real estate loans were not amortizing. They were interest only, and due and payable after three or five years!┬áBut once these loans became amortized, it allowed owners to know and plan their house payment for the next 30 years. This ability to amortize a loan over 30 years, especially using today’s low interest rates, is undoubtedly the best of both worlds: allowing a home to be an investment as well as home sweet home!

A 30 year mortgage allows you to hedge against inflation using today’s dollars!┬áThis is a wonderful thing, especially in today’s interest-rate environment where rates hover below 4%; especially considering that over the last 50 years, mortgage rates have been as high as 20% and no lower than they are today. Being a homeowner really pays off!


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One Response to “50 Years Later: Interest Rates”

  1. Most people today, do not know that the reason lenders got a bad reputation in the depression era, was because the non amortizing loans came due- This forced lenders to foreclose- in fact this foreclosure crisis created the financial reform, which started the long term residential loans we know today !