The Impact of Fed Rate Hikes on Homeowners

first_img in Daily Dose, Featured, Government, News ARMs Federal Reserve Inflation LendingTree loans mortgage NerdWallet Realtor.com 2018-06-13 Radhika Ojha Governmental Measures Target Expanded Access to Affordable Housing 2 days ago The Week Ahead: Nearing the Forbearance Exit 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Subscribe June 13, 2018 2,275 Views On Wednesday, the Federal Reserve raised its short-term interest rate by a quarter percentage point, a move that is most likely to impact home equity lines of credit (HELOCs) immediately. The rate hike, that was widely anticipated by the industry, come on the back of a strengthening labor market and an economy that has been growing at “a solid rate,” according to a statement released by the Fed. The increase points to a target range of 1.75 percent to 2 percent federal funds rate, while “supporting strong labor market conditions and a sustained return to 2 percent inflation.”The statement also pointed to at least two more rate hikes during the year, which will bring the total number of rate increases to four in 2018.According to Sam Khater, chief economist at Freddie Mac, the Fed rate hikes are less likely to impact long-term mortgage loan borrowers this time around. “The Federal Reserve announced their decision to raise the federal funds rate by 25 basis points,” he said. “One thing to point out is that there are fewer consumers today whose debt is tied to short-term rates, and because the majority of consumer debt is from mortgages, this means the recent short-term rate hikes will be less impactful than what was seen in the mid-2000s.”However, the impact of these hikes is most likely to be felt on HELOCs immediately. “With the Fed increasing the federal funds rate, the interest rates on credit cards and HELOCs will rise within a billing cycle or two,” said Holden Lewis, Research Analyst at NerdWallet.Since adjustable rate mortgages (ARMs) and HELOCs are based on short-term rates, they’re most likely to get impacted immediately according to Tendayi Kapfidze, Chief Economist at LendingTree. “The prime rate [for these loans] is a bank lending rate set as a spread to the Fed funds rate,” Kapfidze explained. “It will increase with the Fed hike, and since most HELOCs are tied to this rate, borrowers will see immediate increases in their interest rates.”An analysis by NerdWallet indicated that the central bank had raised short-term rates twice so far this year for a total of half a percentage point. “But the average rate on the 30-year fixed rate mortgage has gone up more than that. It has risen almost three-quarters of a percentage point,” Lewis said. “This larger rise in mortgage rates is a sign that mortgage lenders expect the inflation rate to settle at a higher level over the next few years. Meanwhile, the Fed is expected to keep raising the federal funds rate to capture and hold the inflation rate near its target of 2 percent.”Thus homebuyers looking for a mortgage for the first time are likely to be impacted too. “Homebuyers who have been able to take advantage of the previous uncertainty over rates to lock lower mortgage rates are likely to be satisfied with their decision,” said Danielle Hale, Chief Economist, Realtor.com.However, according to Lewis, homebuyers shouldn’t rush in to buy homes because of this hike in interest rates. “Interest rates on auto loans and mortgages have been going up, responding to market forces,” he said. “Even if rates continue to rise, that’s not a reason to rush into ownership of a car or home before consumers are ready.” About Author: Radhika Ojha Home / Daily Dose / The Impact of Fed Rate Hikes on Homeowners Share Save Radhika Ojha is an independent writer and copy-editor, and a reporter for DS News. She is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her masters degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha, also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Houston, Texas. Related Articles Previous: Evictions Webinar Explores PTFA Implications Next: National Mortgage Servicing Association Petitions FCC on TCPA Regscenter_img The Best Markets For Residential Property Investors 2 days ago The Impact of Fed Rate Hikes on Homeowners The Best Markets For Residential Property Investors 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago Demand Propels Home Prices Upward 2 days ago  Print This Post Servicers Navigate the Post-Pandemic World 2 days ago Sign up for DS News Daily Tagged with: ARMs Federal Reserve Inflation LendingTree loans mortgage NerdWallet Realtor.com Demand Propels Home Prices Upward 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days agolast_img read more

Hollyloft Ski & Bike To Close Next Month After 42 Years Of Service

first_imgShare:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to email this to a friend (Opens in new window) Image via Hollyloft Ski & Bike / Facebook.WEST ELLICOTT – Hollyloft Ski & Bike announced Monday that they’ll be closing on December 24th after 42 years of serving the winter-sports and biking community of Western New York and Pennsylvania. The announcement, posted on the company’s Facebook page, says that Les & Cheryl Johnson are retiring from the business.“Since 1978 in Warren, PA with The Ski Warren, and 1984 in Jamestown with Hollyloft Ski & Bike, they have helped equip local enthusiasts with fun, trending products with enduring value, and always were striving for the best in service,” the company said in a statement. “Hollyloft is grateful to our many loyal staff members throughout the years, and our community of amazing customers that have made this business fun and successful for the past 42 years.”The business says they’ll be winding down operations at the shop over the next few weeks, and they’ll sell down their inventory before eventually closing at 4 p.m. on Christmas Eve. “While this is a chapter closing, it is not necessarily good-bye, and we are actively planning new beginnings as we go dormant for a while to ride out the storm,” the company continued. “We invite you to reach out with your best memories from the past years, to celebrate the friendships and connections made through this one small business that is Hollyloft.”“Memories that attach to our local ski resorts past and present: Buckaloons, Cockaigne, Peek ‘N Peak, Holiday Valley, and Holimont. As well as the many cross-country ski events, marathons, and nordic challenges of the 70’s and 80’s. And of course: the biking world with Team Hollyloft and the many rides and races like Raccoon Rally, Kinzua Classic, Tour De Bemus, and Chautauqua Gran Fondo. While the world-wide pandemic prevents us from throwing a going-away extravaganza, we invite you to virtually share your memories and connections made through Hollyloft over the last 42 years, as we send Les and Cheryl off into a well-deserved retirement.”last_img read more

CUNA: MBL guidance should be open for comment prior to final rule

first_imgWhile CUNA supports proposed changes to the National Credit Union Administration’s member business lending (MBL) regulation, guidance should be released and open to comment before the rule is finalized.In its comment letter to the agency sent Tuesday, CUNA praised the agency for moving from the current prescriptive approach to a more principle-based methodology.“CUNA supports NCUA’s approach because it simplifies the regulation and removes many onerous business lending restrictions in the current rule not mandated by the Federal Credit Union Act (FCUA),” the letter reads. “The prescriptive approach may have been appropriate in the early years of business lending; however, in spite of the FCUA limitations and this prescriptive approach, credit unions across the country have developed robust commercial lending programs with experienced management and sound lending practices.”CUNA also urged the agency to release and permit comment on the supervisory guidance it intends to issue. The proposal requires a more thorough examination of loans and policies by examiners, so the NCUA should provide consistent training and guidance to examiners, CUNA added. continue reading » 6SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblrlast_img read more