How will homebuyers react to a Fed rate hike?
And what’s the one thing you need to do after you pay off your mortgage?
Get answers to these questions by listening to this week’s episode of the Ilyce Glink Show. You can click the audio link below to listen to the full show, or download the podcast via iTunes.
This week, Lorraine Woellert and I discuss the possible effects of rising mortgage rates. Lorraine is the senior correspondent for Redfin, and she’s been writing about the results of a Redfin study on how homebuyers expect their behavior to change if mortgage rates rise to 5 percent. The answer? Not as much as you might think.
Then I’ve got advice for people at both extremes of the mortgage lending process. For anyone shopping for a mortgage, check out my segment on how to make sure you lock in your rate. With interest rates on the rise, it’s more important than ever to make sure your rate is locked. And if you’re a homeowner nearly paid up on your mortgage, you’ll want to hear my segment on the one thing you need to do after writing that last check.
More About This Show
Glinkonomics Report [1:00]
Redfin: Will People Buy Homes if Mortgage Rates Go Up? [4:38]
With the looming potential for an interest rate hike by the Federal Reserve, I wanted to find out how rising mortgage rates might impact how people buy homes.
So I asked Redfin’s senior correspondent, Lorraine Woellert, to fill me in on the results from a survey Redfin conducted this summer. They asked respondents a variety of questions about how rising mortgage interest rates might affect their homebuying behavior. Among the most salient questions were whether or not homebuyers might rush to purchase homes to beat out rising interest rates and whether higher mortgage rates might dissuade them from buying a home in the future.
How to Make Sure You Lock in Your Mortgage Rate [10:52]
Mortgage lenders require that borrowers go through a specific set of steps to apply for a mortgage, often including the payment of certain mortgage application fees, before they’ll lock in a rate. And even then, it’s critical that borrowers check to see that their lender has locked in the mortgage rate they agreed upon. When a mortgage rate isn’t locked in, there’s the potential for the lender to offer a lower rate at closing. But with current interest rates so low, there’s a pretty good chance we’ll see mortgage rates rising in the near term. That means that failing to lock in a mortgage rate with your lender will probably cost you money, potentially to the tune of several thousand dollars over the course of your loan.
You Need to Do This After You Pay Off Your Mortgage [13:50]
It’s a major accomplishment to pay off a mortgage. And after you send in the last installment to your lender, you’ll feel a strong desire to make a bonfire out of all your old payment stubs. But you need to wait until you take one last step before you put your mortgage loan out of your mind for good. And while it won’t cost you a dime, it may require that you invest a little bit of time in making sure that your lender has filed all of the necessary documentation to reflect the fact that you’ve repaid your mortgage loan in full.
If you have any questions about this show or in general, email me at [email protected].
Thanks for listening!