If you’re looking to buy a home or refinance your existing mortgage within the next year or two, it’s a good idea to shop around for the lender who can give you the best interest rate possible.
Why? Simply put, the interest rate is the price you’re paying the bank to borrow money. Not all lenders are created equal and some take advantage of their customer’s lack of knowledge to charge high prices. Remember, It’s your hard earned money and we want to help you maximize your buying power. That means being smart and informed!
You may have heard recently that the Federal Reserve is going to raise interest rates again but what does that mean for you, the homebuyer? It means your borrowing amount, the amount of money your bank is willing to give you, decreases. When costs rise for banks and businesses to borrow, they pass those costs to their customers. To keep their balance sheet (bottom line profits) up, they simply don’t lend you as much, limiting how much house you can afford.
But in spite of all that, as of January 1, 2018, the Federal Housing Administration (FHA) increased their loan amounts on conforming loans from $424,100 to $453,100. For non-conforming high-cost areas, FHA loan limits went from $636,150 to $679,650. With the new changes, this affirms the housing market is still in a good place for the year, giving you time before the environment changes.