How Smart People Handle Interest Rate Increases


If you’ve ever been around someone with 10% body fat complaining that they’re “fat” because they used to have 9% body fat, then you know what it’s like to be around someone who thinks the recent rise in mortgage interest rates means rates are high. They aren’t. Not even close. (Hint: the before and after picture looks the same.)

But if you’re in the home shopping market – or considering a mortgage refinance – an increase in rates can have a real impact on you, whether it’s financial or emotional. It’s real.

So, let me lend some advice:

Change your target. Yup, change where you’re looking. Don’t focus on the 30-year rate, move your gaze instead to the 15-year rate.

While rates have increased in recent weeks, the 15-year rate has moved up LESS than the 30-year rate. At the very least, let this guide you into considering the far greater savings a 15-year term offers when taking out your new mortgage.

On average the savings is over $100,000. And by using a 15-year term you’ll feel like rates didn’t move that much.

It might even help lower your body fat.



An image of a desk phone

"Proving once again that my absence is my greatest contribution, I will be out of the office and invisible to email all week while I play Sherpa for my wife’s February vacation.

 Duties include (but are not limited to): holding each page open on her Kindle, carrying her extra plates back from the buffet line and, my personal favorite, making sure I know where “somewhere” on the planet just hit five o’clock (“Istanbul, honey, Istanbul!”).

 Your prayers for me are welcomed, in fact, they’re encouraged. Have a blessed week."

 Orignally posted February 16, 2017

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