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Talked to a banker.....
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zmracing
Posted 1/23/2015 09:27 (#4332064 - in reply to #4331969)
Subject: RE: Talked to a banker.....


west central MN

I am wondering if there is much difference if the interest rates double from 9% up to 18% or if they double from 3 or 4% up to 7 or 8%. If you plan a cash flow and your interest rates double it is not good either way. In the 70's they might have paid $225.00 an acre interest at 9% and that went to $450.00 an acre at 18%. Today with higher land cost's you could be paying $350. an acre and have that figure go to $700.00 an acre. Either way it throws you cash flow way off. I think there is way more to having a down turn then the interest rates. I think in the 80's that was just one of the items causing the down turn.

I think it would be much easier to have rates double from 3% then it was to have the double from 9%.. There are some variable rate loans out there at 2.5% so those could actually triple. I don't think they will but nobody thought interest would go to 18% in the 80's either.



Edited by zmracing 1/23/2015 09:30
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