Loan Officer Marcia Stolle writes about fixed rate mortgages
Marcia Stolle is a loan officer with Paramount Mortgage Company. In her recent article about fixed rate mortgages she mentions that Warren Buffet likes the fixed rate mortgage. Here is Marcia’s article:
Second-Richest Man Says Mortgages Now a “No Brainer”
Warren Buffett is the second-richest man in America today, behind Bill Gates, and he was the richest man in the world in 2008. He made his fortune through the financial markets, and is considered by some to be the greatest financial mind of our time.
Right now, Mr. Buffett says to get a fixed mortgage – specifically, he calls it a “no brainer.”
Mortgage rates have been falling again lately, and they’re not far from all-time record lows:
“You would think that people would be lining up now to get mortgages to buy a home,” he said at a Fortune magazine conference recently. Buffett has been surprised about the speed of housing’s recovery. He said it “has been slower than I anticipated.” But he is not worried.
Buffett expects housing will recover, as it always does after recessions. He joked that inevitably “Hormones kick in, and in-laws get tiresome.” He likes 30-year fixed mortgages best, calling them “incredibly attractive.” He says that if interest rates go up after you get your mortgage, you win – because you’re locked in for 30 years at a great rate. And if interest rates go down, you win as well – because you can easily refinance at a lower rate.
If you have a long-term view that the dollar is going to weaken eventually, and that interest rates will rise eventually, then, according to Buffett, you really want to get that 30-year fixed-rate mortgage. “It’s a good way to go short the dollar, [and to] short interest rates. It’s a no brainer,” he says.
Marcia Stolle can be contacted at Paramount Mortgage Company, mstolle@paramountmortgage.com.
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