- If you haven't heard yet, rates have already increased by 5% and it is possible that before the end of 2017, they could go up even more. With that being said a lot of people may be wondering if they would be better off buying their rate down in an effort to make sure that their mortgage costs are kept under control.
- The Question is, where do rates go from here
- If you don't know rates are actually tied to the daily trading on bonds that are associated with mortgages. When bonds sell good on the market, rates will automatically increase. This is what has led to the 5% increase so far this year. At the same time, the Federal Reserve will be in control of the short-term rates. This will be accomplished through the use of overnight lending between banks. Again when the Federal Reserve thinks that the economy is going in a good direction, then the rates will be hiked up. This is one of the biggest things that brings up the rates and why this will more than likely lead to an increase in rates yet again this year.
These rates began to be hiked in December and according to the Federal Reserve, if their data is accurate, then these rates will begin to increase again. It will be interesting to see what the next three meetings will bring when they meet on March 15th, May 3rd, and June 13th. These are the days that if the rate is going to be hiked, it will come then.
As the Feds tone for the economy becomes a lot more positive, the Mortgage Bankers Association are hoping and expecting that the rate will go up at least 1%, unlike last year. The good news is that we have seen a part of that this early in 2017.
- What Does it Mean to Buy Down My Rate
- When we talk about buying down a rate, we are talking about the person paying an extra fee beyond your usual fees. This is done in order for it to be reported back to a credit agency and as a result will get the person a much lower rate on their mortgage. Doing this the right way will have a very positive effect on your payments as you can easily get your payments down a considerable amount and save yourself a good amount of money in the long run using something like real link to assist you.
There are some pitfalls that you will need to be aware of when it comes to buying down your rate if you are not careful you could find yourself stuck at a certain rate that may not be good for you in the long term. This is one of the toughest areas that a person manages to get themselves into when it comes to buying their rate down. Going and calculating their rate is not that difficult and if they know what it is that they are doing.
Overall there are advantages and disadvantages to the buying of a rate down for a person. It is best that you make sure that you know all of the information beforehand and that you don't get yourself in a situation that you can't get out of as the rates will increase before the end of 2017. The use of Real Link will go a long way in this process.