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Implications of the Possible Interest Rate Increase

Monday Dec 5, 2016
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The possibility of an interest rate hike that affects mortgages is on everyone’s mind. The Federal Reserve may make the announcement this month and many are concerned about what this will mean for interest rates in the short-term. Indigo Mortgage would like to reassure you that even if mortgage rates rise, there are steps you can take now to protect yourself and ensure that your mortgage payments stay as low as possible.

First of all, the forces that determine mortgage interest rates have already taken the possible rate hike into consideration, and we’ve been seeing rates tick up for the past couple of months. If mortgage rates rise, they will rise gradually throughout 2017, but should remain within 1% of where they are now.

The interest rates that will be immediately affected are variable rates, such as Home Equity Lines of Credit (HELOC) and credit card interest rates. If the .25% rate increase is put into effect, then you will see HELOCs and credit card interest rates rise by .25% each quarter in 2017. By this time next year, you can expect those rates to be at least 1% higher than they are now. It’s possible that the rate of change may increase so that variable rate changes could become substantial.

It’s possible that interest rates may rise, so Indigo Mortgage invites you to take action now to keep your payments as low as possible. Consider getting a low fixed rate on your HELOC or refinance your current mortgage to take out some equity and pay off high balance credit cards. Indigo Mortgage is always here to help and answer any mortgage questions you may have!

Indigo Mortgage is a locally owned and operated company, serving homebuyers in Albuquerque, Rio Rancho, Santa Fe and all across New Mexico. For questions about selecting a mortgage lender, contact Indigo Mortgage in Albuquerque at (505) 836-5700. Indigo Mortgage offers five mortgage divisions including Residential, VA Loans, Reverse Mortgages, Construction and Commercial. They are licensed by the Nationwide Mortgage Licensing System (NMLS #188348), and can provide loans anywhere in New Mexico.

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