Current Mortgage Rates

Friday, September 05, 2008



Property is a good place to invest your money for many reasons.
  • Property is more stable and easier to understand than the share market, which often seems to be the province of insiders and at the mercy of unpredictable forces.
  • Property has a history of producing solid capital gains (of course, this depends on the state of the market at any time).
  • There are many tax benefits associated with investment properties see the section on negative gearing for more information.
  • If something does go wrong you can always sell the property.
Your savings can't disappear as quickly as they can with shares. There's only one reason to buy an investment property - to increase your wealth. There may be many motives for wanting the wealth, but when it comes down to it, the bottom line is always the almighty dollar.

But how do you maximize returns on your investment? There are two main ways to make money: you can generate positive cash flow from rent or buy a property that will produce significant capital gains. The type of profit you are hoping for will determine the location and nature of the property you buy. If buying a big investment property is going to leave you with nothing in the bank, play it safe. You're better off waiting until you have deeper pockets to finance the deal.

Here's why: Owning a large rental property is expensive, and many of the charges tend to pop up unexpectedly, which could leave you in big trouble if you don't have any savings. "What if the boiler broke, what if the roof leaks?" asks Pamela Liebman, chief executive officer of The Corcoran Group, a New York-based real-estate firm. "If you own a multifamily house, you have to assume something's going to go wrong in the house every year, because it does," she says. "You just can't play it that close." The possibility you won't be able to keep the place filled with tenants. Or, just as bad, you find tenants who turn out to be deadbeats and fail to pay up. If you have some savings, that's not a big worry, because you can always tap your own account to make up the difference. But if you don't have any reserves to fall back on, you could wind up in foreclosure.




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Current Mortgage Rates*

Loan Type
National Average
30-yr. fixed6.38%
30-yr. fixed jumbo7.00%
15-yr. fixed5.88%
15-yr. fixed jumbo6.50%
7/1 ARM6.25%
5/1 ARM6.00%
3/1 ARM5.88%
1-yr. ARM6.00%
1-yr. LIBOR ARM5.50%
10/1 ARM7.88%
*Mortgage Rates Updated: 09/04/2008