Macro Issues – Residential Investor Loans

Winners and Losers per Bankrate.com

Some good points below by Bankrate.com, however, they don’t address the fact that liquidity can also be seriously impaired when things get too tough, which I believe is a great reason to go long now on rental properties with a 30-year fixed rate loan. Prepayment penalties decline over 3 years (3,2,1) to zero in year 4 so they have limited impact on future flexibility. Should things get worse before they get better, investors who have long term loans will be better protected from any potential liquidity crunch resulting from further shocks to the system. This cut takes the Fed rate below levels during the 2008 depression.

Winners:

Those able to refinance their mortgages (real estate loans).
HELOC rates down for those using them.
Likely better credit card rates for those who have balances outstanding.

Losers:

CD rates will get even worse than they have been for investors.

See article here

Macro Issues

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