I have a property in the Jacksonville, FL under contract that is in the inspection & appraisal contingency period now. Its purchase price is $110k, and inspection report estimated that repair cost require of around $10k and its appraisal market value is about $170k. I've got interest quote from my lender with 6.2% APR (not locked yet); since I'm still in the contingency period, I'm thinking should I continue to investing this property with this raising interest rate? and will it be worth to invest this property with the high equity already in place?
Any advise on this topic "Should we continue to invest in real estate with raising interest rate?" is appreciated.
It is all about the numbers. I'd talk to another bank and see what you can get. I'm in Canada, so different market and process. We have to renew our mortgages several times, eg 5 year term for a 25 year mortgage means we renew it after 5 years at the current interest rate. I just renewed one of my mortgages last month at 2.49%.
@Tony Zhang If the past is any indication of the future, I'd say interest rates are only going to continue to rise. Right now interest rates are still pretty good vs historically, although that could change very soon.
you might also consider what makes up an exit strategy. Longer term mortgages with locked in rates have value when selling, if buyers are seeking to assume an existing mortgage. Back in the early 80's when mortgage rates in my area were reaching 16%, just about the only thing that was selling were assumptions. Vendor financing was even tough because short term deposits were returning 18%. and preferred over lending.