Real estate in the United States over the last 60 months has seen house prices continually fall. Your current values are now less than (some much less than) what is currently owed on your mortgages. This is true in many areas of the US with few geographic exceptions. As inflation rises, expect your home’s value to decline even more. Your home value is expected to lose an additional 5 to 8 percent in 2012 alone. This is also not the time to go shopping for a new or used home, once inflation hits around 20 percent, which more likely you will see a total collapse in the real estate market. A large number of Americans now believe that a second “Great Depression” is very possible within a few years.
What should you do?
IR – If you do NOT own your home outright and have a variable rate loan…
So sell your house now and rent! Many smart economists and market forecasters strongly recommend that anyone who owns a home today with an adjustable rate mortgage sell it now, regardless of any gains or losses incurred. Holding on to any variable rate loan will continue to cost you more money each month. Due to rising inflation, your interest rate will continue to adjust to keep up with inflation.
Because of this, at some point, depending on your financial situation, you could also lose your home due to inflation. Therefore, selling it now will save you much more money. Once you sell, don’t buy a new house now. Homes will become considerably cheaper as market prices continue to fall due to rising inflation. So rent your next home and get that new house after everything falls apart for much less than current prices. The money you save and the potential gains from the sale of your home can be put to work now, investing in physical gold and silver to hedge against rising inflation.
KEEP YOURSELF: If you own your own free and clean home, have a low fixed-rate mortgage, or…
If there’s no way you’re going to give up your home (many probably feel very strongly about this), get a fixed-rate loan today. Get rid of that variable rate loan fast. Act today, not tomorrow while lower interest rates are still available. If you have a higher fixed rate, try to refinance to get the lowest fixed rate possible, even if it costs you more in fees and points. A lower fixed rate will save you a lot more money each month when rates start to rise. The recent downgrade of Standard & Poor’s US credit rating to AA+ from Triple A makes it possible for the current low rates to start rising. If you fall into a credit trap where you now don’t qualify for a new fixed-rate loan, it’s best to sell now like I said above, regardless of how attached you are to your current home.
Fixed-rate loans are actually your friend during an inflationary period, because your loan won’t be susceptible to future rate increases to keep up with inflation. Therefore, your borrowing costs will actually go down as inflation continues. This means you’re paying less out of pocket as inflation rises. One more comment on this is not paying off your loan early by paying off your principal with additional payments. In fact, you are throwing your money away if you do this now. The money you would normally want to use to pay off your mortgage would now be better spent buying physical gold and silver to protect you against inflation. Throughout history, gold and silver have always protected investors against virtually any and all economic calamities that have unfolded. And NOW, at this specific time, gold and silver will be absolutely critical to your financial survival.
Tom Genot-