You can’t turn on the news these days without hearing some kind of update about the housing market — especially here in the Bay Area. During this past spring, homes were selling quickly and above asking price due to low interest rates and a small inventory. Recently, however, longer-term interest rates increased in reaction to comments made by Federal Reserve Chairman Ben Bernanke in which he indicated it was likely that the Federal Reserve (the Fed) would begin decreasing bond purchases by year end. The Fed’s bond purchase program was designed to keep long-term rates low to enable home owners to refinance into lower-rate mortgages which would, among other things, increase the amount of disposable income for homeowners that could be spent in the economy.
Although rates have increased, it is still a good time to buy a home or refinance. And, at Tech CU, we offer a guaranteed 10-day close on purchase loans — helping to expedite the time it takes to get you into a new home. When it comes to refinancing, the effect of the recent increase in interest rates on your monthly payment can be small, especially when you consider that a refinance might actually reduce your current monthly payments or consolidate higher-interest loans. You can also reduce the length of your loan, pay off adjustable-rate equity lines, finance home improvements, improve financial planning, or make other investments. However, each individual’s financial needs vary. Ultimately, we recommend that you meet with one of our Mortgage Consultant to review all of your financial options.
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