Interest rates have been a hot topic recently, so today, I’ve brought in Wendy Thompson with the Wendy Thompson Lending Team of Bank of England Mortgage to help me explain.
The Federal Reserve raised interest rates by 0.25% last week, and the market actually responded very positively. Rates had been rising before, but we’ve actually settled with rates at about 4.25% with FHA, VA, and USDA interest rates at 4%. The Federal Reserve anticipates two more rate increases of 0.25% this year as well.
The good thing is that despite the recent rise, rates are still very low. If you’re thinking about buying a new home, it’s better to act sooner than later.
Rates have been so low for so long that it’s actually better for the economy for them to go up now. After all, we all want our retirement funds and investments to do well also. The impact of rising rates on your costs isn’t substantial either. For a $200,000 home, a 0.25% increase in rates only equates to about $25 more per month. Historically speaking, having rates this low is great compared to the 18% I saw when I started in real estate.
Many people don’t know that mortgage-backed securities control mortgage rates. That’s why it’s important to work with a mortgage lender who follows rate changes daily. As Wendy says, it’s a bit volatile right now because things outside of the country can even have an effect on rates, so they can change on a dime. Having a knowledgeable lender is more important in these conditions.
If you have any questions for Wendy about rates or getting approved for a home loan, you can reach her at Wendy@TheWendyThompsonTeam.com or give her a call at 901-461-8858.
As always, if you have any questions about our market or you’re thinking about buying or selling a home, don’t hesitate to give me a call or send me an email. I’d be happy to help you!