It is the ultimate dream for most people to own a home. Many times, they opt for mortgages to help them achieve this fete. But mortgages are influenced a lot by market trends and the economy at large. One prominent thing that experts warn is that the mortgage rate will increase in 2019. There are two Type of Mortgage rates Fixed Rate and Adjustable Rate Mortgage
Fixed Rate Mortgage : charges a set rate of interest that does not change throughout the life of the loan. Although the amount of principal and interest paid each month varies from payment to payment, the total payment remains the same . Use Fixed rate Mortgage Calculator to calculate your Fixed Rate .
Adjustable Rate Mortgage : The interest rate for an adjustable-rate mortgage is a variable one. The initial interest rate on an Adjustable Rate Mortgage is set below the market rate on a comparable fixed-rate loan, and then the rate rises as time goes on. If the Adjustable Rate Mortgage is held long enough, the interest rate will surpass the going rate for fixed-rate loans . Use Adjustable rate Mortgage Calculator to calculate your Adjustable Rate .
Flashback to 2019
2019 saw an increase in interest for mortgage plans. Though many experts such as Sun West Mortgage had foretasted this earlier, not so many people paid attention. Rising unemployment and the general decline of the economy were major factors that led to this being witnessed in 2019. At the close of the year, the situation had not changed.
Increase in Interest Rates
Already, the Federal Reserve has announced plans to raise interest rates again in 2019. Sun West Mortgage still predicts that this will have some effect on the interest rates on mortgages. People can expect an increase in mortgage rates. The effect of this will be reduced purchasing power by potential home buyers. Effectively that is also going to affect the prices of homes in the market.
For a savvy real estate investor, it is advisable to be a step ahead of all these. This is the time to seek advice from the leading realtors in the industry. All investments at this point need to be backed up with research on market sentiments.