Rising interest rates and you!

12, after the increases of the Fed, since it seems that the real reason the Fed's action brake on inflation. The Fed seems to be confident that economic growth has advanced, but watch out for that expensive energy could fuel dangerous inflation. All labor relations. All types of loans to pay more. There is a bull's eye, investors will soon see a slight bump in the front, they receive the deposit interest rate loan to go opposite.

Federal Reserve today raised the federal funds rate 1 / 4% to 4.0% of the federal funds rate is the rate banks charge each other for overnight loans, according to the requirements of the Fed Reserve. By buying or selling Treasurys market, the Fed has set interest rates and affect the price of credit. Th rate ePRIME understand that many members will soon be raised the same amount.

What does this mean to you?

Variable Rate Mortgage

The arms are more than one to one relationship with the federal funds rate - which are generally indexed to Treasuries than a year that are closely related to the federal funds rate.

Each borrower feel pain when the rates go up some borrowers who have recently obtained an ARM may be aware that your rate can go up to a maximum of 2 points

If the interest rate two percentage points on a mortgage of $ 216.000 (about half in the United States), borrowers can find the tab for $ 269 more per month.

Fixed-rate mortgages

The Fed plans also mean future increases deliberately fixed mortgage rates may continue to rise.

If mortgage rates rise by 1 percentage point above the $ 216,000 loan would cost $ 140 more per month (5.4% vs 6.4%

Credit lines linked to home equity

Loans are mostly linked to the prime rate so expect an increase in the near future.

Home Equity Loans

Loans are links to equity in the house and are applicable to the exercise of bond yields and / or the first, jointly with the Federal Reserve rate.

If you are in the process of borrowing now, it is very possible payment LOCK RATE TODAY that the full effect can not hit a couple of weeks.

After that look to pay about $ 100 more per month on a loan of U.S. $ 100K -. Copyright 2005 Promotions Unlimited All rights reserved.