Will Rising Interest Rates End Vancouver’s Home... -
[Cached Version]
Published on: 7/7/2004
Last Visited: 4/9/2005
According to mortgage broker, Mikel Erdman, 'The Fed raises interest rates in order to control the growth of the economy and slow potential inflation.As the economy heats up, there are less funds available to lend for long term investments which causes a spike in mortgage interest rates.It appears that this upward movement will last throughout 2005.'
Mortgage rates typically go hand-in-hand with economic cycles, falling when loan demand is low - because of high inflation and high unemployment, for instance - and climbing when demand is higher, such as periods of high employment and healthy GDP growth.
Interest rates go up on the strength of the economy, Erdman noted.Overall, the strong economy will mean more jobs and better stock market performance which have both been lacking over the last few years.Unfortunately, the decade of rock-bottom interest rates may be coming to a close.
Erdman reminds consumers that when it looks like rates are going to rise, it's best to lock in the low fixed rate or move off of the fence with a pending financial transaction. 'Now is not the time to wait.Too many times we have seen people who wait too long miss the best opportunities.Rates are still at extremely advantageous levels and the availability for low-payment loans can get many buyers into homes.'
Mikel Erdman is the president of Metro Home Mortgage Company based in Vancouver, WA.The company is licensed to lend in the states of Oregon and Washington.He can be reached at (888) 823-6635.