When Fed Rates Move Up.
What are the options in home lending?
As with any transition in leadership, such as our country’s upcoming change in January 2017, markets will react. In the case of mortgage lending it depends highly on what the Federal Funds Rate does to the power of money and interest rate adjustments.
We’ve been on a seven year run of excellent borrowing rates in home loan lending. Speculation is that with the most recent percentage move up by the Fed, there will be an upward swing in mortgage rates.
Upward swings can be slow and deliberate, and this newest swing allows enough time to be reactionary if you are looking to stabilize your current situation. Locking in a rate is always the most prudent decision when the swing upward is starting to occur. If you’re sitting on an Adjustable Rate Mortgage, it’s not a bad time to consider locking in with a refinancing option so that you benefit from a stabilized fixed interest rate while the market adjusts.
Historically, the market likes to see what the plan of action of the incoming administration is for the first 100 days of office. Never any guarantees of which way the market will head, it is sometimes always best to air on the side of precaution. Check with your mortgage banker to see how best prepare yourselves for the safeguard of market uncertainty.