The Deferral Program - Why it May Be Time to Sell Your Investment Property NOW

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2021 - What's Concerning about the mortgage default rates?

I have people ask me all of the time, where I see the market going with Duplexes. I’ve been in the business for 20 years now and we're going to talk briefly about one thing that I am seeing. Please remember, I can only report data. I can't give a specific opinion on this because of how Realtors are expected to behave ethically.

Mortgage Monthly News wrote a recent article where they discussed how 8.3% of all people that have a mortgage in the US are 90 days behind or more. Historically, that number has been under 1%. So we’re at 8 times what it normally is. The thing that was most concerning to me was that in the last 2 weeks, 26% of the people that were in forbearance, or 90 days behind on their mortgage, went into a deferral program. 

So essentially, if you went over an 8 week period of time you would double that 8%. My thought is there’s essentially at least 15% of all the people in the US that have not made a mortgage payment in the last 90 days. That’s 15 times what it is normally. A lot of these people entered a deferral program where they don’t make a payment for 90 or 180 days and then it goes on the end of their mortgage, because the banks would otherwise have to foreclose on them legally. So, they’re pushing this down the road. 

You can make whatever you want of that, but it is concerning to me and others that we’re seeing a number of people who are unable to make their mortgage payments. It’s a great time to sell right now. Interest rates on an owner occupant duplex are hovering right around 3%, which is the lowest rate it’s ever been. And you're able, as a seller, to get a higher price because the affordability of that loan is going to tend to be better for the buyer. We’re seeing people get premiums on their properties and we’re able to sell properties at a higher price, in less time, with less hassle than our competitors. 

If you're considering selling your property, feel free to reach out to us at www.theduplexdoctors.com or by calling us at 612-332-9000.