Comments on: Why Now Is The Time To Buy Malibu Real Estate http://themaliburealestateblog.com/why-now-is-the-time-to-buy-malibu-real-estate/ A Malibu Real Estate Blog Giving You The Low Down On The High End---Mike Gardner 1 310 699 8428 Wed, 10 Aug 2011 13:39:32 +0000 hourly 1 http://wordpress.org/?v=3.3 By: Economist E http://themaliburealestateblog.com/why-now-is-the-time-to-buy-malibu-real-estate/comment-page-1/#comment-1572 Economist E Tue, 05 May 2009 16:07:56 +0000 http://themaliburealestateblog.com/?p=651#comment-1572 Isn't it nicer to buy in a high interest rate environment where asset values are lower with the possibility of refinancing in a future low interest rate environment? It's a terrible time to buy when interest rates are low, like now. Prices fall as interest rates rise, because a given monthly payment covers a smaller mortgage at a higher interest rate. Since interest rates have nowhere to go but up, prices have nowhere to go but down. The way to win the game is to have cash on hand to buy outright at a low price when others cannot borrow very much because of high interest rates. To buy at a time of very low interest rates is a mistake. It is definitely far better to pay a low price with a high interest rate than a high price with a low interest rate, even if the mortgage payment is the same either way. Isn’t it nicer to buy in a high interest rate environment where asset values are lower with the possibility of refinancing in a future low interest rate environment?

It’s a terrible time to buy when interest rates are low, like now. Prices fall as interest rates rise, because a given monthly payment covers a smaller mortgage at a higher interest rate. Since interest rates have nowhere to go but up, prices have nowhere to go but down. The way to win the game is to have cash on hand to buy outright at a low price when others cannot borrow very much because of high interest rates. To buy at a time of very low interest rates is a mistake.

It is definitely far better to pay a low price with a high interest rate than a high price with a low interest rate, even if the mortgage payment is the same either way.

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