Quote:
Originally Posted by MrBaldBastard
Better hope you don't have a fuck head playing with the economy then.
because in another scenario one gets mortgaged maxed and then finds interest rates got up 10x what they are now. Property prices cash because less can afford a new loan and those that are going broke dump theirs for what they can get. And all of a sudden your left with a dead asset, that's worth less than you paid for it, and costing your more than your making. Right now, well the past 5 years.. is good times, if your not paying down your debt, be prepared for some serious life adjustments.
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You're right. Mortgage rates could rise (although I'm locked in 20-30 yrs) and could lower prices, but once again that will not affect me because;
1) I got all the time in the world. I'm not a flipper or speculator. I'm a longterm investor. Mortgage rates are cyclical and rise and fall throughout history. I can withstand a 20-30% haircut on my rents and still make my debt service.
2) Mortgage rates go up = less people buying houses and more demand for rentals = $
I've been buying all throughout the 2000s and I can specifically recall my father laughing at me in 2008 when the bottom fell out because I had bought right before the crash. I survived that crash because I put enough down and my rents were never lowered during that crash. Now the mortgage is half paid off and the property is worth 25% MORE than it was in 2007.
Will mortgage rates rise? Yes 100%. Will we go into a recession at some point? Yes 100%. Will I ride out out? Yes 100%.
So are you in Tommy's camp where you pay for your house with cash and give the rest of the money to your bank to collect a pittance of interest and wait for some catastrophic unforeseen event? As an investor with any semblance of investing knowledge you have to recognize that as probably the worst choice you could possibly make. Or are you just going to agree with him because you guys share a love of hating Trump?