It’s no secret that mortgage rates have soared in 2022. Today’s rates have potential homeowners thinking twice about taking the plunge. Some commercial real estate investors are scaling back, postponing their plans, or leaving the investment arena entirely.

Yet there are always good investments to be made, whatever the mortgage rates. The key is to analyze potential deals wisely and work with a lender who understands the market and offers exceptional service.

Rates Are Still Low By Historical Standards

Mortgage rates started to fall with the Great Recession of 2008 and have been low ever since. Within a few years of that plunge, 30-year fixed mortgages dropped under four percent. During the COVID years, they dipped even lower, into the two and three percent range.

Hard money rates, as always, ran higher, but they were still low compared to what had been available in previous years.

People got used to those levels, and some may have expected interest rates to stay low indefinitely. They can’t. They didn’t.

Before lamenting the high cost of borrowing, however, it’s instructive to look at mortgage rates over the past 50 years. The average 30-year rate during that time has been over seven percent. In the late 1970s and early 1980s, it ran into the mid to high teens. For much of the past half-century, people would have been delighted to borrow at today’s rates.

Today’s Opportunities Come at Today’s Rates

It’s pointless to say, “Why can’t I still get last year’s rates?” or “I sure wish I had invested last year.” It’s defeatist to think there aren’t good opportunities just because rates are higher.

People make money flipping houses and in commercial real estate investments no matter the market conditions. One consideration: along with higher interest rates come inflation and more rapid appreciation of investment property. One could argue that today’s rates are still a relative bargain.

As Always, Lender Customer Service Is Key

Here’s a prediction you can take to the bank: in the future, rates will either rise or fall. Here’s another sure-fire forecast: many real estate investors will do well regardless of the rates.

That’s why it’s essential to work with a service-oriented lender. It’s especially true in the world of hard money lending, where every loan is different, and terms and conditions vary widely.

Here are qualities to look for in your real estate investment partner:

  • Knowledge of the local market. Market conditions vary from region to region, and someone with broad local experience can guide you through the investment territory.
  • Ability to act rapidly, as many windows of opportunity open and close quickly.
  • Flexibility in structuring loans to adjust to your dynamic investment requirements.
  • A commitment to fostering a long-term personal relationship with you as their investment partner.

No matter where rates go, you have an edge when you work with a lender who puts customer service first, like the entire team at Norfolk Capital. We’re always proud to help all our clients, and we’ll put your interests first every time. Give us a call today so we can start working on making your dreams a reality!