Interest rates have been low for quite some time, so some people don’t know what to think when they hear reports that the rates are going up this year. Will the rising interest rates impact your family? If you are thinking about buying a home or you have a variable rate mortgage, then it is important that you watch the trends to see how these changes will impact your finances.
December Changes Impact January Rates
On December 14, 2016, it was announced by the Federal Reserve that the lending rate was increasing by .25 percent. This announcement was a short-term rate, but it could have implications on the long-term rates of home loans.
It is estimated that home loan rates went up about .5 percent between the election in November and the announcement in December. These rates have continued to creep, and it is anticipated that the rates will keep moving in an upward direction.
What Higher Interest Rates Mean for You
Some people are stressed about higher interest rates because they worry that they won’t be able to afford a mortgage payment. But, the truth is that these small changes won’t have a major impact on most families for now. When an interest rate increases by .5% on a $300,000 loan, then it means that your payment will go up by about $85 per month. This increased payment is feasible for many people.
It is anticipated that the rates will continue to rise, but experts suggest that the increase will happen at a slower rate going forward. The Fed has suggested that rates will rise three more times in 2017, which means that you can expect three more increases if you have a HELOCs.
Protecting Your Finances
Are you worried about the rising costs of variable interest rates? Then, you might consider locking in a fixed-rate mortgage while the rates are still comparatively low. If the rates continue to increase, then HELOC payments will go up. But, you don’t need to worry about rising payments if you have a fixed mortgage.
Before you refinance your current home, it is a good opportunity to assess if you should move into a new home. You might consider the benefits of upgrading your home to better support the needs of your family. During this transition, you can choose a fixed-rate mortgage for the financing of your new property.
At DUFFY Realty, our goal is to help you find the right home for your family. We can refer you to mortgage specialists who will help you get the best interest rates available, allowing you to purchase a nice home to meet your needs. If you are ready to buy a new home, then we are here to help! Talk to us about your goals, and we will locate your dream home: (678) 318-1700