Federal Interest Rate Drop: What Should I Do With My Mortgage?

The Federal Reserve lowered interest rates for the first time in years last month. What does that mean for homeowners and prospective buyers? Let’s take a look at home these new lower interest rates are affecting the market. 

Adjustable-Rate Mortgages Will Cost Less

Mortgage borrowers with adjustable-rate loans will reap the most out of this lower rate. This is because those interest rates are tied to short-term rates. On average, borrowers will see a change in their lender statements the month after the Fed lowers rates. 

Refinancing

If you closed on a loan at 5%, you might consider refinancing. If you can get a rate at least 1% cheaper than your current one, it may make sense, depending on fees. With this option you can access home equity via cash-out for any reason such as home improvements, bill consolidation or education. Our loan officers at First Ohio Home Finance help you find the best rate to refinance and offer advice based on the market. 

Potential Homebuyers

First time homebuyers should take advantage of these low interest rates. Fixed-rate mortgages aren’t expected to decline because of the Fed rate cut since they are already largely priced into the current level of market rates. The best approach for homebuyers is to determine whether they can afford the home they want based on their down payment and current mortgage rates. Today’s rates are some two percentage points below the historical average.

Our loan officers are up to date on the current market conditions and can help answer any questions you have about mortgages, refinancing or about interest rates. Contact us today to get started!