The FED announced they have raised the overnight fund rate by a .25%. This is the rate Banks borrow at overnight.
This is a modest move and will not affect fixed long term Mortgage Rates.
The rate increase has the following features:
- They are only considering raising rates because the Fed believes our economy is strengthening and can handle a bump in rates
- This will have a direct impact on variable auto loans, home equity credit lines, small business loans, credit cards
- This will have a positive effect on interest rates the banks pay on savings accounts, CD’s, and other interest bearing accounts
- On a $250,000 Home Equity Line of Credit, there would be an approximate $52 difference in monthly payment, nothing life changing
Don’t be afraid, be informed!
http://finance.yahoo.com/news/fed-readies-first-hike-almost-135151591.html
Source: Madison Lending Group