The Federal Reserve raised rates another 0.25% last Wednesday. This is the second of four projected increases over this year. How does this effect mortgage rates. It doesn’t directly impact rates, however mortgage rates tend to follow suit on the climb higher shortly after. That’s because the reason the Fed is raising rates such as inflation, and a strong economy do cause interest rates to move higher.
The Fed funds rate, which is what they increased. Directly raises the rates on short term debt like credit cards and Home Equity Lines of Credit. So nearly all Americans will see higher payment on some of their debt. One way to get this under control is by refinancing and taking advantage of some of your equity. If you have enough homeowner’s can potentially roll all their debt into a first mortgage loan with a low fixed rate and payment. Then you don’t have to worry about the payments going up another two more times this year and even more in 2019.
If your a first time buyer or investor and are on the fence about moving forward. Just know it’s going to cost you more to buy a home in a few months than it is today. So acting sooner than later may be in your best interest. Call or email us if you have questions or want to discuss your particular situation.