Since the historic dip in interest rates post-recession, interest rates have slowly risen and are now at their highest point over the last 7 years. Experts anticipate this upward trend to continue as the Federal Reserve projects to make additional rate hikes in the coming years. Per mortgage buyer Freddie Mac, “the benchmark 30 year rate is pushing towards the significant 5% level…”
Although interest rates are going up, we have provided solutions to our clients to combat this. With most homeowners refinancing or selling their home every 5-7 years, Adjustable Rate Mortgages are a great solution. In a recent home purchase we funded, a client putting approximately 10% down and borrowing a $1,000,000 saved around $40,000 in the first 7 years of the adjustable program. This is savings that they plan on allocating to paying down principal, which will accelerate his overall home equity.
Post-recession, Adjustable Rate Programs have been taboo however, when coupled with a plan that is executed property, it can be a powerful savings tool. Adjustable Rate Mortgages not only decrease home buyers interest expense but increase overall affordability. If you or anyone you know is currently shopping for a home and feels the need to reduce their purchase price due to higher rates, have them reach out to us for a quick comparative analysis.