While a higher interest rate clearly means higher monthly mortgage payments for new homebuyers, how does an increased rate affect current homeowners? For one thing, it means now is the time to act if you’re considering refinancing or relocating.

Interest rates and first-time homebuyers

Unfortunately, many consumers (especially in Florida) were affected by the Great Recession, either because they had joined the ranks of the unemployed, faced significant losses in the stock market, or were simply paralyzed by fear and uncertainty. Of those who were financially capable of purchasing their first home during the recession—when rates and housing prices were historically low—how many regret not striking while the iron was hot? Don’t let the same thing happen to you when today’s 0.66% rate eventually climbs above 1%.

Making sense of a move

When the Fed lowered the rate during the Great Recession, there had never been a better time for financially stable consumers to purchase a home. If you were among the fortunate few who actually benefitted from the recession and managed to buy property, you’re still reaping the rewards of an extremely low interest rate. While a low interest rate makes staying in your current home—and mortgage—tempting, don’t lose sight of the future. If you know you’ll eventually need to purchase a larger home because your family is growing, for instance, you’ll want to do so now while the rate is still incredibly low. Yes, your new mortgage rate will be higher than it was in 2008, but it will still be lower now than in 2020.

Refinance while rates are still low

If your mortgage still carries a high, pre-recession interest rate, don’t wait another minute to refinance. Locking in a lower rate makes sense not only if you want to lower your monthly mortgage payment, but also if you want or need to borrow against your home’s equity. A cash-out refinance is an excellent option if you need to restructure higher interest debt, cover unexpected expenses, remodel your home, or simply need an infusion of funds.

What makes sense for you?

If you’re not sure how rising rates will affect your unique situation, a MIDFLORIDA mortgage specialist can help explore your options. If you decide to refinance your home or purchase a new house, your mortgage specialist will guide you through the entire process. To learn more, give us a call at (863) 688-8443 or toll free (855) 915-4663, or visit your local mortgage specialist.