Fall has officially arrived (at least according to the calendar)!! The overriding theme with interest rates is that we are facing a slow and steady climb upwards. The end point of this upward trajectory is hard to determine, but we still might have another 1% or so to climb!! The Federal Reserve has a meeting this week in which rates are expected to be increased by another .25%. The market will let us know when rates have reached the equilibrium point….The overall economy appears to be on very solid footing and the tenor and statements of the Federal Reserve are in line with raising rates for the foreseeable future in conjunction with the maintenance of a healthy, growing economy.
We are advising our clients to review their existing home loan mortgage details. If an equity line of credit is involved, please consider consolidating your existing mortgages into one new mortgage even if this means a higher rate. With the Federal Reserve increasing rates a fair clip, equity line rates which are already in the mid 6% range, will be going higher…. These home equity rates rise in tandem with the increases by the Federal Reserve. Additionally, be mindful of when the draw period is maturing and converting to principal and interest payments based on a 15 year repayment schedule. Additionally, if your mortgage is fixed for a certain period of time, be sure to stay ahead of the curve and inquire on what the adjusted interest rate will be. What to do with your mortgage needs??? Reach out to us. Let’s have a conversation or send us an email. Now is the time to review if refinancing makes economic sense. Maybe it’s the time to switch from the adjustable rate mortgage into a fixed rate or even a new adjustable rate with a longer fixed period. Might be a consideration to refi into a new 7/1 arm even if you have a year or two left on your existing fixed period. Maybe it’s time to “bite the bullet” and switch out of the adjustable rate mortgage and get more conservative with a 30 year fixed. I guess what we are trying to convey is that everyone has their own unique set of circumstances and that we can assist in tailoring a mortgage strategy that is congruent with your overall financial plan.
There are a number of new loan programs available in the market place that are based upon either one’s individual or business bank statements. The bank statements are utilized in lieu of the traditional tax return methodology. We have recently closed quite a few large cash out refinances in the $4-5,000,000 range and saved purchase transactions from clients whose banks rejected their applications from an income perspective…..These are excellent programs using non-traditional underwriting methodology.
The real estate market seems to have reached a plateau with pockets of increased inventory and price reductions. The adage that all real estate is local is very true for our markets. When we hear the national numbers, although a good overall barometer, our local market has a life of its own. Have conversations with your real estate agent to obtain a more specific understanding of your particular market area.
As always, please feel free to connect with us to review your financing situation and just to say hello!!
Gloria Shulman and Curtis Cohen