As consumers know, the feds are determined to raise interest rates beginning in March 2022 and have announced at least three more increases during 2022, in an effort to slow inflation.
Mortgage rates are not directly tied to the feds raising interest rates and home loan rates look like they’ll settle somewhere in the low to mid 4% range for the rest of the year.
When the feds raise interest rates, it more directly effects variable interest rates like for credit cards or home equity lines of credit (HELOCs). This means borrowers who have high balance credit cards or borrowers who have HELOCs could see their payments double, triple, or quadruple in the next few years.
The experts have always said that the best hedge against inflation is to get your biggest debts under the lowest fixed rate. By consolidating high balance credit cards or HELOCs into a new home refinance, this certainly applies to what the experts say.
Borrowers still have a great opportunity to take advantage of the low mortgage rates to consolidate any variable rates into a low fixed rate mortgage. If you have high balances on credit cards or a HELOC with a balance, it’s a good time to call Indigo Mortgage. We’ll do an evaluation for you to see if a refinance will work for your situation.