Interest Rates won’t stay low forever. It is therefore important for people with credit card debt to focus now on paying it down as soon as possible. We can help you obtain the cash you need with a Cash-Out Home Equity Loan.
The federal funds rate, which is set by the central bank, is the interest rate at which banks borrow and lend to one another overnight. Although that’s not the rate that consumers pay, the Fed’s moves still affect the borrowing and saving rates they see every day.
The Federal Reserve announced Wednesday (11/3/2021) that they’ll be purchasing fewer bonds, which means mortgage rates are likely to rise slowly through the end of the year.
When the pandemic began last spring, the Federal Reserve made the move to purchase bonds to keep the economy running smoothly. Now, as the market recovers and inflation rises, the Fed says they’ll begin to pullback the relief measure. Mortgage analysts expect to see rates rise steadily from now until the end of the year.
This may not be bad news for your mortgage, though. Rates are still at a low point from a historical perspective. Many homeowners could still save on a refinance, and homebuyers may see fewer bidding wars as higher rates cool down today’s intense competition.
Mortgage rates tend to jump around after any Fed meeting, so locking sooner rather than later may help you save more. Ask your Loan Officer for guidance.
Even though the Federal Reserve didn’t raise its benchmark rate Wednesday, the days of low rates are clearly numbered.
Fed Chairman Jerome Powell is likely to stress the end of the bond program and the start of rate hikes are not connected, but the market is already aggressively pricing in two to three hikes next year.
Once the federal funds rate does rise, the prime rate will as well, and homeowners with adjustable-rate mortgages which are pegged to the prime rate, could also be impacted. If you have an adjustable-rate mortgage (ARM) you may consider refinancing to secure a fixed rate now.
The good news is that higher interest rates could help slow the demand for homes somewhat, which could result in less dramatic home price growth, homes staying on the market for longer, and fewer bidding wars.
This is not a commitment to lend. Not all borrowers will meet the qualifications necessary to qualify. As a result of refinancing your total finance charges may be higher over the life of the loan. Brighton Bank NMLS 892951, An FDIC Member and Equal Housing Lender, 6489 Quail Hollow Rd., Suite 106, Memphis, Tennessee 38120