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Real Estate

Date Added: October 15, 2008 10:09:51 PM
Author: M Gravlee
Category: Real Estate
The real estate market is heavily influenced by current economies and interest rates. When you desire to purchase your dream home it is vital that you fully understand and make good use of your knowledge to get the right home within the right price range for your family. Every year thousands of families are foreclosed upon simply because they failed to properly understand how much fluctuating interest rates could affect their mortgage payments.

Interest Rates and the Economy

Rising interest rates work in two ways. On the one hand the rising interest rates on investments are a good thing. For example, if you have an investment with interest rates that vary with the economy you are going to see more returns.
On the other hand a mortgage rate which is based upon current interest rates is also going to rise. The higher the interest rates are in the nation the more you are going to be required to pay for your monthly mortgage. Current interest rates are based upon the economy and the rate of savings in the nation. The more people save and invest the lower the interest rates are going to be.

Interest rates continually change in order to stabilize the economy. As people invest interest rates rise. This causes consumers to begin to spend and invest more conservatively which in turn causes interest rates to lower. This is the cycle of the economy in most countries that are based on a capitalist economic system.

Changing and Fixed Interest Rates

If you want a fairly stable mortgage payment you can try to find real estate that is offered with a fixed interest rate. A fixed interest rate is based upon the current economy and will not change over time unless you refinance your real estate.
There is a downside to investing in real estate that is sold with a fixed interest rate. If the current interest rates drop your current mortgage will stay the same despite lowering mortgages for those with changing interest rates.


Taxes are based upon your property assessment. Your property will be assessed every year and the amount of taxes you pay will be based on your current assessment. There are several things that can cause your taxes to be more or less than the year before.

Rising property taxes are usually caused by an increasing property value in your area. The property value can increase because of commercial or personal property developments in the immediate area. Some people especially in rural locations which are undeveloped will experience a relatively stable tax rate over time.

Commercial real estate property often has a higher annual tax rate then the personal property values but the rate is also dependent upon the size and location of the property which you own.

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