The Federal Reserve just raised interest rates by a quarter of percent.
Sounds small right? Well you may be surprised to find out how big of a difference this can make on your monthly mortgage payment.
This is the first time since 2006 that an increase has been made. In an effort to head back towards the direction of normalization in the economy, the feds raised the interest rate a nominal amount. This increase should help strengthen the US dollar. Overall this shows the Federal Reserve perceives the US economy as strengthening. A planned gradual increase will continue until 2018, when normal levels are reached of 3.5%.
What does this mean for someone looking to buy a home? Take a closer look below!
You may be surprised to find out that .25% has big effects in the long run. If The Fed continues to increase the rates every quarter by .25%, you will be looking at a significant jump in your monthly mortgage payment. This is why we encourage anyone looking to buy a home in 2016 does it sooner than later.
Take a look at the figures below to see the difference. You are spending an extra $114 per month!
$200,000 Home Price at 4.1% interest = $1,135 Monthly Payment
$200,000 Home Price at 5.1% interest = $1,249 Monthly Payment
(Based on a fixed 30 year mortgage and a 5% down payment.)Find Out What Your Home is Worth
Call/Text: 763-777-2257 for more information about Maple Grove Homes for Sale.
Sourced from http://www.bbc.com/news/business-35117405