Let’s first clarify that 30-year fixed mortgage rates rose more than half a point after the presidential election. Rates are above 4% for the first time this year, and now the Federal Reserve Board has announced its first rate hike of 2016. Word on the street is to expect the Fed to raise rates at least a couple more times in 2017, which would put home loan interest rates at just under 5% by the end of next year. So, what’s the take-away for home owners and home buyers?
If you’re already a homeowner with a fixed-rate mortgage, your rate is set. You’re good to go.
If you have an adjustable-rate mortgage, your rates will likely increase, and you may want to begin shopping for a new mortgage if you plan to stay in your home for a few more years.
If you have a home equity line of credit, you may want to convert it to a fixed-rate home equity loan or pay off your line of credit before rates go up.
If you’re in the market to buy a home, it makes sense to proceed with your plan since interest rates are still historically low, and it will take quite a climb before mortgage rates are back to their 44-year historical average of 8%. Even a 6% mortgage is a good deal compared to the average!
Additionally, keep in mind that higher interest rates can be offset by better wages in an improving economy, and Los Angeles real estate, in particular, remains one of the best investments you can make!
Please follow and like us: