You keep hearing, “The feds are planning to increase rates” Why is this a big deal?
If you are planning to buy a home an increase can have a dramatic impact on how much home you qualify to buy. For every .5(one-half) percent increase in interest rate your purchasing power may be decreased by 4 to 5 percent. Often people want to wait until they save more for a down payment, but this often isn’t the best strategy. You may be better off locking in a lower interest rate now. The effect of a larger down payment may be minimal compared to the increase caused by a rise in interest rates.