Who cares about interest rates – people’s lives still change regardless

Yes, currently home mortgage interest rates are at 7%+ but who cares. Did you know is the early 1980’s interest rates then were in the teens. Yes, high teens and people still bought and sold homes because life doesn’t stop. You need to move, you lose a job, you get a better paying job, want to move closer to family, family member dies, and life continues and that home needs a new buyer. You may also decided to rent it or airbnb it.

I think interest rates will continue to climb. I really don’t see doom and gloom in the markets. There are always business cycles. One thing I have noticed though if anything isn’t really being talked about in the market is HELOC – equity line of credit loans on the majority of owners/investors that don’t want to sell but likely used a large amount of equity from their home to fix it up or maybe buy something. Now those variable interest rates on those financial products are climbing – I know. I actively buy, fix up, and sell homes as a business and I use a home equity line of credit a lot as my own hard money (HELOC). Well those early 3% interest rates are now 8-9% on those products so payments and interest is higher. I pay mine off immediately when I sell the home I used them for, but what about a person in a different situation that they can’t repay them so quickly. This is what I’m more worried about with job layoffs, rent increase, and higher mortgages if they bought a bigger home. It does create a situation in which things could go sour really quick if financially that persons life changed for the bad.

I’ve worked and lived through some real estate growing pains. So I try to keep my risk low as possible and live on peanuts. I guess as the Federal Reserve keeps increasing rates we will see if defaults in HELOC credit comes up. I want to be around to help solve the problem. I’m here if you need help.

-Paul