Well, I've wasted the last 2 hours arguing with people who are not in the real estate industry. I've been in it for 35 years--my first 15 as a lender and the last 20 as a Realtor.
They're throwing out stuff, they know nothing about, and I counter the argument.
I refinanced my home 5 years ago at 3.75%, which is historically low. My dad, who bought his house in the mid 1960s was paying 4.25%, and was mad because the builder wouldn't take a VA loan as oppose to conventional because it took too long.
If you've been in the business a while, it wasn't until around 1986-7 when the VA let the market rate determine the interest rate rather than having the VA set the rate. (I remember when around 1986-7 a VA loan was around 9-9.5% and 10 points! seller had to pay points!)
Anyway, the following graph is a good history lesson of mortgage rates, and I think explains one of the factors of skyrocketing home prices.
In all my time as a loan agent, nobody ever asked me "How much loan can I AFFORD?" They all asked "How much loan can I GET?"
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