Latest Rates from First Brunswick
Vince Bacchi
Senior Loan Officer
First Brunswick Mortgage
910 352 6562 cell
910 842 1658 office
910 842 1659 fax
Mortgage bonds have been in a correction “mode” over the last several days and today’s low unemployment number heightened the sell off. As you can see from the rate sheet attached there has been some upward movement. Low unemployment drives fears of “inflation” but as long and lending remains dormant (and it’s been shrinking), fears of inflation will remain just that…..fears.
Paying cash VS a loan, what’s the best choice? Certainly paying cash is the easiest for the Realtor and the buyer. Write a check and you’re done, almost that easy. But does it make good business sense?
If a buyer can qualify for a loan and has decent credit, the buyer can borrow at around 5%, give or take (less if they take an ARM). When a person can get money that cheap does it pay to use cash? Some people can earn that or more investing wisely. Most importantly, if a buyer uses their own money in a transaction, they need the banks permission to get it back out. Think about this for a second. If a person buys a home for $300,000 cash and somewhere down the road they need $100,000 out of the home for an emergency, they need to get the banks permission to take it out. What if their credit status deteriorates? What if they lose a job or become sick? What if, like now, bank rules change?
By the time you write off interest on 5% money, it’s close to free. Every time I hear about people buying million dollar beach homes for cash, I scratch my head. Why? Why not borrow some or as much as you can qualify for?
