[quote=matt-waiting]What will happen when all these first time buyers who are locking in super low interest rates want to sell and buy a larger home when rates are significantly higher? Will they have to bite the bullet and pay off their 3.5% loan only to take out a larger loan at 6,7,8 percent?
Say for example, right now I have a smallish house at a fixed rate of 3.5%, but in a few years want to “move up,” sell, and buy a bigger house. I am guessing when that time comes, rates will be much higher. Any way around this? If not, doesn’t this create a disincentive for more expensive real estate purchases in the future? …
Will I be stuck in my 2 bedroom house with my 5 kids and 2 baby mamas because I refuse to pay off a 3.5% loan?[/quote]
Well, depending on how much you paid for it, and how much your monthly is, there is the option of looking to see if you can convert it into a rental.
A lot of things can happen from now until you “move up”. The nice thing is you only need to “move up” if the dollars are there. I mean if you can afford to move up now, now’s probably not a bad idea to be looking.
Also, what makes you so sure rates are going to move up quickly?
Third, if rates do go up, it’s probably means the economy is going to recover somewhat in general. If you’re in a good career, you might as well do better too. Easier to make more money in a good economy than in a bad one you know.
