What Fed Rate Hike Means for Mortgage Rates by Jane Herro
Mar 23, 2017 brooklyn mortgage,brooklyn news,buying a home,federal rate hike,federal reserve,interest rates,jane herro,love brooklyn,mortgage rate increase,mortgage rates,trump mortgage
The Federal Reserve decision on the 15th to lift its benchmark short-term interest rate by a quarter percentage point is likely to have a domino effect across the economy as it gradually pushes up rates for everything from mortgages and credit card rates to small business loans. Last week, the average rate of a thirty-year fixed rate mortgage climbed to 4.21%, a 2017 high. A year ago, it was 3.68%.
Already a homeowner? A few points to consider…
*If you’re already a homeowner with a fixed-rate mortgage, you’re all good. Your rate is set.*If you have an adjustable-rate mortgage, you’ll likely see your payments increase over the next year, depending on how often your rate resets. Keep an eye on mortgage rates and consider moving to a fixed-rate loan. You may want to begin the mortgage shopping process soon if you intend to stay in your home for a few years.*If you have a home equity line of credit, it’s a good time to consider your options. You may want to convert it to a fixed-rate home equity loan, or budget for paying off your line of credit before rates move much higher.
Thinking about buying?
*If you’re all set to buy, don’t let moderately higher mortgage rates worry you. Proceed according to your plan. While the long-term outlook seems to indicate steadily rising interest rates, we’re building on very low ground (mortgage rates have a 44-year historical average of 8%).*Yes, your buying power can be affected by higher interest rates, but that can also be offset by the better wages and greater employment opportunities of an improving economy.
To read more on how rising rates could impact your life, click here.