Your Mortgage Rate and How the Fed Affects It

What do all the headlines about the Fed raising interest rates really mean for you and your mortgage rate?

Think of it as a fast food chain, if their cost for a burger goes up, then they need to charge a higher price for that burger. This is much the same for the Fed raising the rates.

When big banks and lending institutions borrow at a higher interest rate, they pass that increase onto the smaller banks borrowing money from them, and so on. Nerdwallet talks about it HERE.

If your mortgage rate is fixed and you aren’t planning on refinancing or buying a new home, this won’t affect you right now. If your mortgage rate is adjustable, you are likely more aware of the risk of market movement. One of our loan officers can get you locked into a fixed rate mortgage, while you check out another good read from FOX Business.

With the rumors of more mortgage rate hikes down the road, it may be a good time to look at locking in on a long-term, fixed-rate mortgage. As long as your cap rates and return on investment are sound, purchasing in a market where the mortgage rate is rising can make sense.