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

Andrea L. Testimonial

I want to thank you for making the process of establishing a loan so easy for us. As a real estate agent in Denver, I have the opportunity to work with a lot of lenders – I know the good ones from the bad ones. And YOU are definitely one of the “good ones”. For my own home purchase, you can imagine how selective I was in working with a lender on our mortgage. I am so glad that we worked with you and CityWide. It’s no secret that the process of procuring a mortgage is extremely stressful, but you made this process as smooth of a transaction that it could have been and given the fact that we lived in Denver, and Marcus was in the middle of a very hectic travel schedule, you met and EXCEEDED our expectations.

Your attention to detail, your personal attention to us and our needs, and your overall professionalism made the biggest difference and the best possible experience for our family. I will recommend you not only to my friends and family but to my clients who are looking for the highest level of service for their mortgage.

Thanks again Jim for everything you did for us. We are so happy to be back home in Naperville, and in our house, that very much feels like home.

Andrea L.