Will Interest Rate Rise? Top Things You Should Do

It is almost inevitable that interest rates are going to rise sooner or later. The question is how soon will interest start to rise and how fast. There are some things you should do now before we see higher interest rates.

Will Interest Rates Rise?

Interest rates have been held low since the financial crises in 2008, sometimes as low as zero percent. Inflation is starting to rise, which usually means that the Fed (The Federal Reserve Board) needs to raise interest rates.

The Fed continues to say inflation isn’t rising very fast, but anyone that buys groceries and other items knows that isn’t exactly true. It will be surprising if the government doesn’t raise rates sooner rather than later.

Mortgage Rates

The main factor in the low mortgage rates is the Fed buying $40 billion per month in mortgage-backed securities (MBS). They have recently said they will begin tapering this off by the fall. Economists believe this will cause mortgage rates to start rising.

If you’re in the market for a new house, you should consider buying one now before rates go up. As mortgage rates rise, you will be able to afford less house for the same money. You also have to be careful not to buy a home during a time that home prices are overly inflated. You can ask about housing market price trends by calling real estate companies in New Castle.

Get a Fixed Rate Mortgage

If you have an adjustable-rate mortgage (ARM) at this time, you should consider refinancing your home at a fixed-rate mortgage. This is especially important for those that plan on living in their home for at least five years.

If you already have a fixed-rate mortgage, look into refinancing your home before interest rates rise. You could save a considerable amount of money each month. The current low mortgage rates could also give you a chance to shorten the length of your loan.

Selling Your Home Now

If you have been considering selling your home for any reason, now could be the best time. Mortgage rates have been at historically low levels, and an increase in interest rates will most likely cause mortgage rates to rise as well. Increasing mortgage rates will dampen the hot real estate market.

In July 2021, Treasury Secretary Janet Yellen mentioned there is an increased risk of a housing bubble. By selling now, you are practically assured to get a great price for your home.

Should You Buy a Home Now?

The housing market is as hot as it’s ever been right now. Buying a home now could be a good idea before interest rates start rising. Even though prices are high, buying now could still save you a good deal of money per month on your mortgage.

If you’ve decided to buy a home, have everything ready before you start looking for a new home. Start shopping for a mortgage as there are numerous mortgage options. And then get pre-approved for a home mortgage. With the pre-approval in hand, you are ready to start house-hunting.