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Murfreesboro, TN - August 17, 2018 - The economy is strong and unemployment is low, both signs that creeping interest rates will continue their upward climb. In the last three days, both the Chicago and Richmond Federal Reserve Bank Presidents indicated more interest rate hikes on the horizon for 2018.
According to Michael Daugherty of MidTNMortgages.com, “The Federal Reserve described the United States economy as strong last Wednesday which puts a rate hike in September above 90% according to those economists surveyed. This could put additional pressure on the front end of the curve where the spread between the 2yr treasury (2.67%) and the 10yr treasury (3.00%) is already considerably tight at 33 basis points. The probability of another interest rate hike in December is currently at 65%.”
If you have been on the fence about when to make a purchase, buying your home now is ideal for two reasons. First, to lock in the lower interest rate. This could mean potential savings of thousands of dollars over the life of your mortgage loan. Even a small interest rate hike will impact your monthly payment.
Kelly Cearing of KellyLeads.com says, “With rates on the rise, you want to be sure you are with a lender you trust to get you in the appropriate lending product and best rate for your transaction.”
The second reason to buy before interest rates go up is to qualify for as much home as possible. As rates rise, the amount of loan you can qualify for reduces, sometimes significantly. It can mean the difference between being approved for a $300,000 home or a $250,000 home depending on the current rate. In a market with lower inventory available to choose from, having more flexibility in your purchase price could make a huge difference in getting exactly what you want.
Kelly Cearing, NMLS# 15556, is a mortgage lender with First National Bank in Murfreesboro, TN.
Michael Daugherty, NMLS# 1233387, is a mortgage lender with First Community Mortgage in Manchester, TN.