Current Prime Rate Increases Have Many Home Loan Borrowers Worried – Loan Love Explains What Is Causing The Spike Upwards In A New Article

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A new article from LoanLove.com explains the historical basis for the recent changes in interest rates.

LoanLove.com is a borrower advice website that provides detailed insights into the mortgage industry in a fun and entertaining way. The team at LoanLove.com is devoted to help empower both first time and experienced homeowners with valuable resources, first-class knowledge and connections to top-rated industry professionals and has the mission of helping consumers and borrowers to obtain the latest information on mortgage lending trends, the real estate market and the U.S. financial landscape in order to help them obtain a home loan that they will love. A recently posted article on LoanLove.com continues to help home loan borrowers to understand the real estate landscape by explaining the recent sharp increases in the current prime rate and what these rate increases mean over the long term.

The article first starts off by explaining about past finance bubbles and how while it is easy to look back an see what went wrong, it can be just as easy to miss the signs that are happening right now. The article says: “For most of us, it’s easy to get wrapped up in the minutiae of day-to-day living; but sometimes, learning to read the signs and signals of broader economic indicators can help you make much wiser financial decisions. It’s always easy to do a little Monday morning quarterbacking and say, “Wow. Anybody with a brain could have seen THAT was going to happen.” For example – looking back at the housing bubble and seeing how incredibly overpriced many homes were – not to mention the sizes of the mortgages a lot of lenders were writing – it’s easy to say now that the housing market was poised for a fall – a big one.”

“But while some people got stuck with a lemon – like an inflated mortgage that left them owing more than their home was actually worth – other people watched as the economy began to spiral downward and waited for the adjustments and incentives that would surely follow. You can guess which group came out on top.”

What the article tries to point out is that the same things are happening right now. The current spike in prime rates is due to a number of factors but basically what it points to is that the low rates that were being given earlier this year are gone for good. This is not as shocking as it may seem, as the low rates were always meant to be a temporary way to shore up the weak economy, and as Loan Love explains, these types of things have happened in the past. The article points to a number of different “bubbles” that have already happened, even “tulip bubble” that had 17th century investors paying up to ten times the annual salary of a skilled craftsman for a single tulip bulb. The Loan Love article says:

“So what can we learn from all these bubbles? First, it’s true, history does repeat itself. And knowing that, we can be a little bit smarter when we shop for mortgages or other investments. So, the next time you see housing prices or mortgage rates (or tulip bulb prices) spiral upward or downward, take a breath before plunging in; while it’s easy to get sucked into the buying frenzy, it’s much wiser to look at the broader picture so you can, hopefully, spot the signs that can spell disaster – or opportunity. Today’s interest rates are nothing new- in reality, rates are still near rock bottom if you took an average of the past 15 years. If you haven’t guessed by now, they’re definitely going up. And going up fast. Act quickly if you’re looking to acquire or sell real estate, time is against you (at least in the short run).”

For more information on the current prime rate increases, please visit LoanLove.com for the full article.

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Kevin Blue
Loan Love
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