👿💰🌎 JUST IN: Federal Reserve Raises Interest Rates by 75 Basis Points – AGAIN 👿💰🌎
(www.thegatewaypundit.com)
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The Fed is raising their rate 0.75% or 75 basis points. They are doing this to try to curb inflation. The problem is, with interest rates rising, it will have a domino effect on other lending rates. We've already seen mortgage rates rise significantly this year and with this news they will only go higher. The fed rate doesn't directly affect mortgage rates, but it is a sign the money will cost more to borrow.
As mortgage rates go up more and more people will default on their home loans, especially if their rate is floating (meaning it fluctuates) or if they have an Adjustable Rate Mortgage (ARM) loan. With an ARM, the interest Rate is locked for a period of time and then adjusts to the Market. So one might have an ARM at 3 percent now, but when the initial term ends, say after 3 or 5 years after it was originated, that rate could go up to 5% or more. That's a 66% jump in the interest rate.
The higher the interest rates the less home people can afford. This will make it harder for people to buy homes and it will also force home values down. If people recently bought a home and now it is worth $100,000 or $200,000 less, they could be in financial peril, especially if they put little money down. Home equity loans will be under water, meaning the equity the loan is based on will disappear due to the lower valuation. The money people think they have in their homes will disappear.
The "reason" the Fed raises interest rates is to try to cool a market down so it doesn't crash so hard. The problem right now is we are already in a recession. Raising rates now will only fuel the crash and make it hit harder.
It would be in everyone's best interest to plan accordingly. Save cash. Sell your expensive toys. Be prepared.
This is just my opinion. I am not a financial advisor or a lender. You should speak with an expert you know and trust. Find someone who lived through the last market crash as they will have personal experience with what happened before. Avoid new lenders or financial planners that have never seen a market crash before.
Thank you for the lesson - I really am a dork when it comes to money. My husband manages money very well for us and his business. But I contribute to our lives in my own good ways (gardening and preserving, providing health insurance through my job). It’s great to be a team :-)
Everything takes time to learn and there is always more to learn! Glad you found the right partner.
Speaking of gardening and preserving, that's something I'm trying to learn. Have dabbled in it this year, and plan to have a full victory garden by next year.
If the world keeps crashing down we're all going to need to know how to provide food for our families.
It (gardening) may really be needed for survival in the future, but it is also so much fun to start a seed and watch it grow :-). Good luck!
It is alot of fun! It is also a great metaphor for life.
You need to plan ahead.
You need to get started.
You need to mind your goals daily.
You need to make small corrections along the way, but stay focused on the end goal.
It's easier to achieve your goals if you are surrounded by like minded people who share the same goal.
God's beauty and creation is all around us and you can literally see his planning unfold around you if you pay attention and do your part as well.