After much speculation over the last year, the Federal Reserve chose to recently increase the key interest rate for the first time in seven years. The rates went from a range of 0% to 0.25% to an increase of 0.25% to 0.5%. While the rate hike was a small one, it will impact home buyers along the Jersey Shore.
Rising mortgage interest rates could impact your housing budget. However, it’s not time to panic. It’s time to start planning. Start by speaking with a loan provider to see what you can afford, shop around for the best loan rate, and get approved quickly. Mortgage rates vary from lender to lender and from day to day so take the time to shop around.
This little rate increase by the Federal Reserve more than likely will not have too much of an impact on mortgage interest rates. However, if rates continue to rise, home buyers will be paying more each month. Many economists are predicting that interest rates will continue to increase by 1.0% over the next year. This will impact your monthly mortgage payment. For example, if you borrowed $300,000 with a 30-year fixed-rate mortgage your monthly payment would increase by $100 with only a 0.50% increase.
If you are looking to buy a home along the Jersey Shore start now by working to increase your credit score, as this will provide you with a lower mortgage rate. If you currently have an Adjustable Rate Mortgage (ARM) and plan to stay in your home for the next few years, now would be the time to refinance to a fixed-rate loan.
The Ferzoco Group is experienced in working with buyers and sellers from Ocean City to Cape May. If you are looking to sell or buy a home let us know how we can help. Our job is to make your tomorrow better than today. Contact us today via email or give us a call at 609-264-6762.