Despite Interest Hikes, Mortgage Rates Stay Super Attractive

The Federal Reserve raised short-term interest rates last week, but mortgage rates remained virtually unchanged, making it an ideal time to refinance or lock in a mortgage on a new home.

Many people think Fed rate hikes should lead to higher mortgage costs, but that’s not always so.

That’s because the Fed controls short-term interest rates, while mortgages reflect long-term interest rate expectations. The two don’t always move in sync.

A typical 30-year fixed mortgage is still available at 4% or under, says Steve Chaney, Loan Officer with U.S. Mortgage of Florida. A 15-year fixed mortgage is priced at around 3.375%.

If you’re in the market for a new mortgage or a refinancing, Steve says a credit score of 740 or over will earn you the best rates.

Also, clean up your credit as much as possible before applying for a loan.

Here’s one of Steve’s tips to help you land the best mortgage deal:

Keep credit card usage at or below 30% of the maximum credit line allowed on each card (that’s called the credit utilization ratio). That will help keep your credit score in pristine shape.

About Mari Adam

Mari Adam, Certified Financial Planner™ and President of Adam Financial Associates Inc, has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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