Federal Reserve Rates

Have you heard references to the Federal Reserve or "the Fed" in the news? These reports usually pertain to the Fed's raising or lowering of interest rates. The impacts of a rate decision can vary. Here are a few things to remember:

• The Fed sets target rates for bank-to-bank and Fed-to-bank loans.
• The Fed does not directly control fixed mortgage rates. In fact, fixed mortgage rates can change well in advance as the market anticipates any adjustments.
• The prime rate is directly influenced by Fed moves. This rate is often used as the benchmark for interest charged on credit cards, auto loans and Home Equity Lines of Credit (HELOCs).

There's talk that the Fed may raise rates before the end of the year. That may make this a good time to "lock in" a low rate on a purchase if you’re so inclined. Existing owners may want to consider refinancing or combining adjustable rate loans like HELOCs or even consumer debt into one low fixed rate. Consolidating debt is not for everyone, but talk with your local lender to decide what is best for you.

Happy Investing!

Today's blog courtesy of Cheryl Taylor, American Pacific Lending