This week's highly anticipated Fed meeting brought good news for potential home buyers. Due to the Fed’s concerns over a looming weaker global economy combined with the expectation of higher inflation levels, investors were willing to bite the bullet and accept lower rates for maybe another few months.
Caution is in order. The Fed cannot keep rates artificially low forever. We're looking at current rates at and below 4% that could easily jump to 5 or 6%. A rate jump of 1% raises the monthly payment on a $500,000 loan (30 year fixed) by about $300/mo. That's $300 every month that would go to your mortgage company instead of staying in your pocket.
Caution is in order. The Fed cannot keep rates artificially low forever. We're looking at current rates at and below 4% that could easily jump to 5 or 6%. A rate jump of 1% raises the monthly payment on a $500,000 loan (30 year fixed) by about $300/mo. That's $300 every month that would go to your mortgage company instead of staying in your pocket.
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