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Sitting on a home with 2-3% interest is all well and good, until the value drops and you’re sitting on a much worse asset. I.e. if you own a second home with a
by ec109685 4y ago
Sitting on a home with 2-3% interest is all well and good, until the value drops and you’re sitting on a much worse asset.
I.e. if you own a second home with a 3% interest rate, should you sell now or collect rent on it?
- NDizzle 4y agoIf you have a second home at 3% that means your first home is paid off. You wouldn’t get that rate for an income property. There are several good reasons for selling it, mostly emergency or retirement reasons. I would keep it and rent it. Inflation is more than double that 3%, “officially”. What a great problem to have. Anecdotal data, regarding value drops. I’m in a 30 fixed at 3% in Arkansas. Houses I was looking at in a new subdivision were around $410 when I was looking, this time 2020. They are now in the $700s, and that’s with the current interest rate. So 3 years of mortgage payments, down payments, you’re looking at an outstanding balance on the loan of… around $300k? The value drop people think needs to happen probably won’t ever happen. Especially since the USD is turning into Monopoly money due to terrible fiscal policy.
- ec109685 4y agoGood advice. In our particular case, we bought a new home and are letting family member stay at old one, so have two mortgages.
- icelancer 4y ago> Sitting on a home with 2-3% interest is all well and good, until the value drops and you’re sitting on a much worse asset. What is the mechanism of action that causes the value to drop?
- ac29 4y agoHigher interest rates mean lower house values.