What to do now? Mortgage rates have been at historic lows for some time now and as many claim that there is nowhere to go but up, we continue to see low rates. If eventually the Federal Reserve does raise rates, in turn, mortgage rates will follow. With that in mind, several new questions are raised. Who is going to want to get out of their 3.75% mortgage? Will this bring the new dawn of HELOC and 2nd Mortgages? Are people going to opt for the remodel or new addition to their existing home instead of seeking out a new home with a mortgage that may not be as cost effective? This is quite possibly the second huge challenge to an ongoing housing recovery.
Only time will tell, but as interest rates start to climb the real challenge may be enticing people to actually move out of a home with a record low interest rate. Investors that position themselves in the HELOC and 2nd Mortgage product categories may become the real winners in the long run. I for one already find myself wanting to position myself into a home that will meet my needs long down the road as having a 6 or 7% interest rate almost makes my head spin.
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