Bryan Davenport talks about interest rates and some exciting loan programs.

 

Today I’m sitting down with Bryan Davenport from Gateway Mortgage to talk about interest rates. About a year and a half ago, interest rates were around 2.5%, but now they're approaching 6%. We wanted to dive into why those rates are so high, what that does to our market, and more.

 

Why have interest rates climbed so quickly?

 

We had a lot of things affecting our economy, but the big one is that inflation is skyrocketing. A lot of that is because supply chain issues have backed up a lot of products, and the costs of materials have also increased. The only way the Federal Reserve can lower inflation is to raise interest rates. People have varying opinions, but some think the Fed didn’t raise rates as soon as they should have, so we’ve seen rates rise quickly recently. That has caused a little bit of shock in the market, but things should settle down. Honestly, a 5% or 6% interest rate is normal; we just haven’t seen them for a while and got spoiled. Before COVID, we were just about to head into 5% anyway.

 

"Honestly, a 5% or 6% interest rate is normal; we’ve just been spoiled."

 

Have there been any conventional mortgage changes that might affect second homes?

 

Absolutely. Frannie Mae and Freddie Mac announced some pricing changes for second-home buyers at an unfortunate time. If you’re buying a vacation home, your interest rates will now be equal to, if not higher than, the rates for investment purchases. Those rates used to be the same as if you were buying your primary residence, so this change has increased the rates significantly. Gateway Mortgage has decided to waive that fee, so if you’re buying a second home, you won’t have to pay that higher interest rate.

 

What can you tell me about Gateway’s new condotel program?

 

When you buy a condo in the Myrtle Beach market, there are different guidelines based on what conventional financing calls for. If you look for properties outside of that scope, like a condotel, mainstream financing isn’t available. We’ve created a program that will help that type of customer. You can use it with your primary residence or your secondary home. You’ll need a 20% down payment, or 25% if you’re an investor, and the interest rate is very attractive.

 

If you have any more questions, feel free to call or email me. You can also email Bryan at byran.davenport@gatewayloan.com to talk to him directly. We’d both love to hear from you.