If you’ve been in the process of searching for a new home, you may have been stopped in your tracks after the most recent round of Federal interest rate hikes – the third such increase in 2018 alone.
But, while this increase may seem to have put a damper on the low monthly payment that you’d been hoping for, the reality is that mortgage rates in the U.S. have actually been rising gradually for over a year now – and, while average rates for the 30-year mortgage are currently at their highest level since 2011, a long-term fixed rate mortgage can still be secured for under 5%.
In addition, more good news is that it is unlikely that home mortgage rates will see any type of significant effect from the last uptick in interest rates last month – and many experts agree that it would actually take a substantial rise in inflation to make a big difference, at least in the area of fixed rate home loans.
If, however, you currently have – or you are considering – an adjustable rate mortgage (ARM), you could see your monthly payment go up. That is because loans with adjustable rates are more closely indexed to short-term interest rates, and in turn, can be impacted more by changes in interest rates overall.
Even so, however, if you are still in the early stages of a 3/1 or a 5/1 ARM, going out and refinancing shouldn’t be at the top of your to-do list…at least not quite yet. That’s because there is still plenty of time left in your guarantee period.
If you’re considering the purchase of a home, we can help you to ensure that the whole process goes smoothly – from your initial search to receiving the front door keys at the closing table. For more details about how working with an experienced real estate team in Bakersfield can benefit you, just give us a call today.