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Q: Is this the time to lock in rates for as long as possible when purchasing farm real estate?

Wed, Dec 8th, 2010
Posted in Ask the Expert

A: After living through the high interest rates of the 80's, when rates are low, it is hard not to lock in a rate for as long as possible. The peace of mind that the rate and the payment cannot increase can be the determining factor. There are other factors to consider as well. The longer the rate is locked at the lower interest rate at the beginning of a loan, when the principal owed on the loan is the highest, is an advantage. When the loan balloons at a later date, a somewhat higher rate can be better tolerated.

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