4 Positive Aspects of Rising Mortgage Rates

Aug 19, 2013 No Comments by

In the past few weeks, mortgage rates have risen from their lowest point in decades, and people who wanted to refinance are the bemoaning the increase. However, homeowners have several reasons to be thankful for the change in interest rates:


1.) Rates are still at historic lows. You’ve been hearing about “record low interest rates” for a while, but now many commentators are more focused on the increase in rates rather than the fact that they are still incredibly low. For most people, the higher rates won’t affect housing affordability, meaning it is still a great time to buy or refinance your home.


2.) Increasing rates usually mean the economy is improving. Higher rates indicate the consumer confidence is strengthening, and investors are gaining confidence once again. In turn, a better economy will push home values up—which is certainly good news for homeowners.


3.) Rising rates will give potential homebuyers an extra to incentive to purchase. With the threat of rates going up even more, buyers may stop waiting to get the best deal while they still can.


4.) More purchase mortgages, rather than refinance ones, translates into relaxed lending standards. Since fewer people are refinancing with the new higher rates, lenders are competing for customers who need purchase mortgages. To get their business, lenders have become more flexible with debt-to-income ratios and loan-to-value ratios—which is great news for homebuyers!

Mortgage, Refinance

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