Sure is difficult on the real estate industry, although I’m certain it’s difficult on a lot of industries not to mention a horrible strain on the health care industry. Great news for the TP industry – can you short them after the pandemic when everyone realizes they have way too much? Big question for all of us is when will we be able to get back to actual work? We were having a few tours over the past week, very few, but nothing like what you’d expect this time of year and now that the governor has implemented a stay-at-home order, those will go to zero for the foreseeable future.
So where does that leave us? Good question. Don’t know. Glad we have great pictures, do video walk-throughs, aerial videos and 360 degree videos allowing our prospective clients virtual access to just about everything in our inventory. I expect that this will create a high demand when this is over, more so than we’ve seen in the not so distant past. When we first started selling property on Lake Keowee all we had was a DOS based 286 computer, hardline phone and a 19” television with 3 channels – allowing us to watch a lot of Matlock (with commercials and a bit of fuzz on the screen).
The Internet has made dealing with Covid-19 a lot easier on all of us, thereby making it easier to follow the rules. Hopefully, everyone will begin to do that with more frequency as the virus can’t spread to you if you don’t come into contact with someone who has it. Nobody wants this to hit home with the death of a loved one especially if they contracted the virus through a lack of following said rules. So, for now, let’s all stay home, wash our hands, sneeze in our elbows and wait this out knowing that things will return to normal sooner rather than later. God Bless America!
Adjustable. Fixed. Balloon. It’s easy to get lost in mortgage verbiage. Here’s a rundown of the most common loans.
Adustable-Rate Mortgages – Your interest rate (and monthly payment) rises and falls with the index to which it is tied. Because they start out two or three percentage points below fixed-rate mortgages, they’re particularly popular when fixed rates are high. To protect you against interest rate hikes, the best loans put a cap on annual rate increases of two percentage point a year, with a lifetime increase of now more than five percentage points above where you began.
The most popular ARM indexes are those linked to three-month, six-month and one-year Treasury Bills, the 11th District Cost of Funds (DOVI), the prime rate and the London Interbank Offer Rate (LIBOR).
As a rule, ARMS make more sense if you don’t plan on staying in your home longer than five y4ears at most. Which index is good for you depends on two things: forecast and your personal comfort level.
LIBOR and T-Bill indexes, for example, react more immediately to changes in the economy – a good thing when interest rates go down, not so good when they rise. Whatever happens, you’ll see it pretty quickly in your monthly payment.
More conservative buyers prefer indexes linked to the prime rate or the COFI because they’re more stable and move up (and down) more slowly than other indexes. That’s good when rates are low and rising, less so when they’re high and dropping.
Is an ARM a good choice for you? Well, if you need a lower monthly payment to afford the home you want and you’re planning to stay there less than there to five years, then yes. But make sure you can handle the higher payments that might come down the road. A prudent approach is to always plan financially for the “worst case” scenario: Assume that your loan will always rise the maximum amount. If you wouldn’t be able to afford it, then consider another loan. You know your own personal “comfort level.” Use it to make your decision.
Let’s say you are buying your first home. You have a modest income today but a bright future. Even so, you need to keep your payments low. A long-term ARM makes sense even though your interest rate could rise over time. If you move in the next two or three years, you won’t be around for any significant rate hikes. if you choose to stay longer, a rise in income will help you keep pace. Or you can always refinance to a fixed-rate mortgage.
More next week….
Check out the Lake Keowee Real Estate numbers for the year
Anglers looking to practice social distancing on the water received bad news when South Carolina Gov. Henry McMaster issued an executive order closing all public access to the state’s beaches and waterways.