Another Fed Rate Hike, What Does it Mean?

Last week, the Fed hiked rates by a quarter percent for the third time this year. With our improving economy, this was completely expected and is the eighth hike after the rate was held at a record low for seven years. It is now 2.00%-2.25%, which is still historically low.

The Fed Funds Rate is the short-term rate set by the Federal Reserve for overnight loans between banks. Here’s what it means for the rest of us:

  • Don’t panic about fixed-rate mortgage rates. These are based on long-term rates, which the Fed hike does not directly affect. However, mortgage rates over time usually follow overall rate trends, though there are exceptions.
  • Adjustable Rate Mortgages (ARMs) and HELOCs may be affected sooner. ARMs and HELOCs (home equity lines of credit) are based on shorter-term rates and may be impacted more quickly. The Fed indicated another quarter percent hike in December, so borrowers might want to lock in their rate now.*
  • Now is a great time for a mortgage review. In many cases, the equity you have in your home may allow you to eliminate mortgage insurance and substantially lower your monthly payment. As with all tax matters, always consult with a tax professional before making any decisions.

Please call, text or email us with any questions you may have about financing or refinancing your home. We’re always here to help.

*The mortgage bond market is always paying attention to what the fed is doing, so expectation of future increases or decreases are usually already priced into the bond market.

The Jim Passi Team at Citywide Home Loans proudly serves Illinois, Wisconsin, Michigan, Indiana, Georgia and Flordia. If you are looking to buy a home or refinance, we have you covered. Apply Now to get started.
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Jim Passi - Citiwide Home Loans

Jim Passi
Regional Manager
NMLS# 158000

1300 East Woodfield Road, Suite 302
Schaumburg, IL 60173
Mobile: 847-899-1813
Email: jpassi@citywidehomeloans.com

He was professional and easy to work with

Jim helped me with the purchase of my first single family residence. He was professional and easy to work with. My purchase was definitely not an easy transaction to complete as I also had a sale contingency, in the transition of becoming a full time employee and about to go on maternity leave. We closed both home transactions timely without any issues on the same day. Thank you and the team for making my first residential home purchase become reality especially on time before the baby’s arrival. I would recommend Jim and his team for your next home purchase.

Charlene C.