THE FEDERAL RESERVE FIRES UP THE PRINTING PRESS
The Federal Reserve has few tools left in its tool box. The discount rate is already almost at zero so the Fed will fire up the printing presses and pump money into the credit system, to lower long term interest rates for families and businesses. This will make homes more affordable than ever for Americans. Yesterday, the yield on 10-year notes dropped, bad news for people on fixed income from interest and bonds. The dollar also took a hit, just a reminder of the inflation that will inevitably follow. This also is good news for future home buyers.
As the Fed creates money to lower interest rates it empowers buyer to get record low interest rates on their homes, and then they can pay the money back with inflated dollars, while inflation drives up the equity in their home. Since buyers have only say 20% cash investment in the new home, the tax free profit they make on the inflationary increase is leveraged and their equity increased. For example, if You buy a home for $300,000 and put down a 20% down payment of $60,000, and the home goes up at a 5% inflationary rate You make 5% on the $300K not only the $60K; You will make $15,000 on the $60,000 or 25% return. So then inflation can be working hard for You, instead of against You. In times of inflation any valuable hard asset will earn you the same high yield return. This is why gold and silver are such a popular investment in today’s market.
A home is a hard asset and is historically the best investment in troubles times. Not only will you make money but You can live in your investment, while you will enjoy special income tax treatment. We are MARK ENGLISH REAL ESTATE and DISCOUNT MORTGAGES SERVICES and are Your one stop shop for all Your EVERGREEN COLORADO REAL ESTATE and CONIFER COLORADO REAL ESTATE. We are also an EVERGREEN COLORADO CUSTOM HOME BUILDER and are looking forward to serving You with all Your Real Estate needs. Please, give us a call at 303-674-0148, Email us at markenglishrealestate@msn.com or visit us on the web at www.evergreencoloradoliving.com . Don’t forget to register for Your FREE BUYER INCENTIVES.