Today, we’d like to introduce you to one of our team members. Brian Decker of Guaranteed Rate is here to discuss the future of interest rates over the next year.
The Federal Reserve was expected to raise its benchmark interest rate in either September or December of this year. As December approaches, it’s important to know that this will have an almost immediate impact on rates and longer term bonds.
A 30-year fixed mortgage rate will go from 3.5% or 4% all the way up to 5%. To give you an idea on the effect this will have on somebody looking to purchase a home, let’s say you are approved for a $300,000 loan. Just a 1% rise in interest rates takes that $300,000 purchasing power all the way down to $250,000. As you can see, a 1% rise will affect the amount someone could qualify for by $50,000.
With this interest rate hike looming, there is never a better time than today to buy. If you have any questions about today’s video, give us a call or send us an email. We would be happy to help you!