According to the Freddie Mac weekly market survey, mortgage rates have increased by 0.5% in the past year (April 2017 – April 2018). This means your monthly payment today could be approx. $30/month higher than it was last year for every $100,000 you borrow. Here are two ways this could impact you:
1 – If You’re Thinking of Buying a Home It may be worthwhile for you to consider buying a home now instead of waiting. That’s because most economists anticipate that interest rates will continue to go up throughout this year due to:
- Risk of higher inflation, which leads to higher interest rates
- A greater supply of bonds due to growing budget deficits
- Less demand for bonds due to the Fed winding down their bond-buying program
It may benefit you to lock in today’s rates instead of waiting for interest rates and monthly payments to move higher.
2 – If You’re Thinking of Making Home Improvements You may be able to fund your new project by using a “cash-out” mortgage refinance. That’s where you trade in your current home loan for a larger home loan, and use the “cash-out” for your new home improvement project. For the same reasons outlined above, it may be worthwhile for you to consider doing this now instead of waiting.
Contact me for more info or to explore your options!
PLEASE NOTE: This article is provided for illustrative purposes only. It is not an offer or commitment to lend you money, and it is not an advertisement for a specific mortgage or a specific interest rate. Payment examples don’t include property taxes and home insurance. Contact me to run the numbers for your situation.
