Three Effects of an Interest Rate Hike


1. Qualification Becomes Bigger Deal: Sorting the Dreamers and Planners

As consumers get wind that borrowing, and consequently buying, are going to get more expensive there may be an uptick in interested buyers.  Be careful. Sometimes buyers moved by the headlines, aren’t really prepared to pursue their dream.

As an agent, having a proven and concrete qualifying process that includes a trusted mortgage lender are going to be critical to reap the benefits of the buzz.

2. Down Payment Digging Might Get Tougher

According to Financial Analyst and CNN contributor Patrick Gillespie, “Once the Fed raises interest rates, savers will gain more interest on the money they deposit at their bank.”

When people who are used to making nothing off their money in the bank see the effects of a rate increase, they could become more skeptical about withdrawals.

3. Approval Deadlines Will Be More Serious Business

Anytime a major factor or big news hits the lending environment changes, the speculation alone can affect real estate and the interdependent mortgage industry in a flash. When market’s decline, the standards and terms of lending change. When interest rates move, the same can be true. In changing paradigms like these, buyers and their agents may want to work extra hard to close on time. A change in rates or the headlines could mean a higher rate loan or dealing with a deal-breaking change in valuation if their loan approval expires.

*Info from

Until next time….


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