Real Estate Blog

What impact does the Federal Reserve’s recent decision to raise the fed funds rate have on mortgage rates? Don’t panic.  It’s not too late to get a rate.  Here’s the good news.  The fed funds rate only has a direct impact on prime rate based mortgage products as well as adjustable rate mortgages (ARM’s).  These loan types make up only 7 to 9 percent of mortgages.

Impact is indirect on longer term interest rates such as a 30 year fixed rate mortgage.  This means long term mortgage rates are more likely to increase gradually.  There is no doubt we are in a great spot right now. We have a rare combination of a strong economy and historically low interest rates.  This combination will not likely last long.  If the economy remains strong as is expected, the probability is that long term rates will continue to rise as the Federal Reserve makes decisions to keep the economy balanced.

Let’s look at an example of how future interest rate increases can impact purchasing power.  A family with an annual income of $100,000.00 and $1,000/month in consumer debt can qualify for a mortgage payment in the range of $2,800 per month which equates to a purchase price of around $560,000.00 if they buy now.  If long term rates go up by .5%, this family’s purchase power has been reduced to around $520,000.00.  Keep in mind, this does not take into consideration that in most areas, property values are expected to continue rising due to the strength of the economy.  Therefore, their price point has been reduced by increased rates.  However, in addition they will get less house for their money due to property value increases.

If you are considering buying and want to maximize your purchase power as well as the amount of home you get for your money, now may be the perfect time to strike.  If you have any questions or would like to explore the possibility of buying and/or selling, please contact me at 615 506 1050 or at cwoods@swbcmortgage.com.  Recent client reviews are available at https://www.facebook.com/pg/Woodsmortgage/reviews/?ref=page_internal

As always, I recommend that you talk with a lender before you start looking at houses just to be sure you credit hasn't been tampered with. That way you have time to straighten out any issues that might come up.....

...."You've got a Friend in Real Estate"

Jarod Tanksley 615.403.8265

www.BrentwoodandBeyond.com

Brentview Realty 615.373.2814

Keeping your home in tip-top shape sometimes requires more exstensive work than you can manage. Sure, you can watch a YouTube video to learn how to unclog a toilet, but some projects extend the reach of your skills, patience, and any YouTube instructional video. When you know your home project is out of your skill set, you need to know the best person to hire for the job. People often ask me for references on handymen and contractors, and I'm always pleased to recommend several in the Brentwood, Tenn., area.

People also ask me how to know whether you should call a handyman or a contractor for particular jobs. As a general answer, I say to call a handyman for smaller projects that might fall under a "honey-do" list and stick to contractors for bigger jobs that might require moving a load-bearing wall or adding on to a current structure. Although you can find handymen who specialize in certain areas such as plumbing or tile work, if you have a job that requires several specialties, a contractor can sub-contract someone for every specialty area that you need.

The number one way to find the best people to work on your projects is by word of mouth. Getting those first-hand references are the best representation of what you will actually get. Reading reviews is helpful too, so look for those online to see what other people are saying.

Do your homework. Saving a few dollars up front on someone could cost you big dollars in the end if you're not thorough. And don't be afraid to do a background check or to interview more than one person to make sure you have the right fit for your project and for your family.

One of the most important things to make sure of is if that person you hire is licensed for your particular project, and that they are insured and bonded. This is the only way you can be protected if anything goes wrong. If you hire an unlicensed person and they get hurt on your property, it could pose a huge threat to your financial security. Ask for a written agreement of everything. You do not want someone to walk away with unfinished or faulty work that does not even meet your local codes.

I'd be happy to point you in the right direction of people that I trust will do an excellent job for the project you have in mind so give me a call....

....."You've got a Friend in Real Estate"

Jarod Tanksley 615.403.8265

www.BrentwoodandBeyond.com

Brentview Realty 615.373.2814

photo credit: freedigitalphotos.net