If you’re thinking about buying a home or refinancing your mortgage in California, there’s some important news on the horizon. The Federal Reserve (often called “the Fed”) is expected to lower interest rates by about 0.25% to 0.5% in September 2024. These reductions could continue into 2025. But what does that mean for you, and how should you react?

Understanding Interest Rates

First, let’s clarify a common confusion: the interest rates set by the Fed and mortgage rates are not the same. The Fed’s rate affects how much it costs for banks to borrow money, and this, in turn, influences the rates they offer to consumers. While they are separate, there is a strong correlation between the two. When the Fed’s rate goes down, mortgage rates often follow.

Benefits of Lower Interest Rates

1. Buying a Home: If you’re looking to buy, a lower mortgage rate means you could afford a more expensive home or enjoy smaller monthly payments on your loan. Even a slight drop in rates can save you thousands over the life of a mortgage.
2. Refinancing Your Home: For homeowners, refinancing at a lower rate can reduce monthly payments or shorten the loan term, allowing you to build equity faster. It’s a chance to take advantage of better terms that could save you money in the long run.

Don’t Jump Too Soon!

With the anticipated rate drop, it’s tempting to refinance as soon as possible. But here’s the catch: if the Fed continues to lower rates into 2025, you might save even more by waiting a little longer. Jumping into a refinance too quickly might mean missing out on better deals down the road.

Beware of Cold/Scam Callers

A rate drop will likely bring an increase in cold calls from companies urging you to refinance immediately. While it can be tempting to respond to these offers, remember that it’s crucial to work with someone local and trustworthy who understands your specific needs. There can be a mix of fraudulent calls in this mix often times phishing for your information. Be diligent and be careful when providing information to people you are not familiar with.

The Importance of Working with a Local Mortgage Broker

Having a local mortgage broker you trust can make all the difference. They can provide personalized guidance based on real-time market updates, ensuring you make the best decision for your unique situation. Jeanine Nucum is a local trusted mortgage broker who takes pride in offering hands-on assistance to her clients, helping them navigate these changes with confidence. Search your mortgage broker, see what the community says about him or her and look to see if they are experienced. If you simply cannot find them online then you may want to reconsider and find someone local and reputable.

Stay Informed

Keep in touch with a reliable mortgage broker who can provide you with the latest information on interest rates and how they might affect your mortgage. With the potential for continued rate drops into 2025, staying updated will help you make smart, informed decisions.

Final Thoughts

Interest rate changes can significantly impact your finances, so understanding these adjustments and making the right moves at the right time is essential. Whether you are looking to buy a new home or refinance an existing mortgage, consider your options carefully and seek advice from a trusted local expert.

By staying informed and working with a mortgage broker you trust, like Jeanine Nucum, you can navigate these changes and find the best opportunities to save.