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Fed Rates Have Increased

Posted on January 13, 2017 by Ray Williams (NMLS #216267).

As you know by now the Fed funds rate increased, just as predicted, and discuss at the FOMC meeting in mid-December.  Do not to be fooled by the advertisements stating mortgage rates for 2017 are going up. When you hear “the Fed rates are going to go up, so hurry up and purchase or refinance because mortgage rates are rising”. Wrong, this is completely inaccurate! Yes, the Fed rates have increased, but as a result to the election. Yes, the Fed increased their benchmark Fed Funds Rate BUT this does not mean mortgage rates are increasing.  Fed funds rates pertain to short-term interest rates (HELOC, credit cards), not long-term rates. Historically, immediately following when the fed rates increase, then long-term mortgage rates decrease!

There are an expected three more fed rate increases this year so be sure to watch out for the changes if you are looking to refinance and/or purchase a home. Historically when this happens you will see mortgage rates dip, yes dip! The best advice I can give is if you are in the market for wanting to refinance and/or purchase then reach out to your lender early.  Start your application and pre-approvals now, so when its time you are ready.  Unfortunately for a purchase, you are unable to lock into a rate until you are under contract.

FHA Lower MI

FHA did lower their mortgage insurance rates, please don’t confuse this with mortgage rates. This will help lower that monthly mortgage insurance, which for many this will help in qualifying for a home purchase. As well as this may increase the purchase price ability. If you would like to learn more, discuss or have questions please give us a call.

There are great things happening 2017 for the Real Estate market and it always helps to be ahead of the game.

If you would like to learn more, discuss or have questions please give us a call.

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