Ask Your Estate Appraiser in Napa County, CA About How the Economy Can Affect Your Mortgage Rate

At County Appraisals Inc., we work hard to give you accurate information and advice to help you plan for the future of your property and business. That includes staying on top of the latest trends in the economy, since this can have an effect on your mortgage rates. If you need expert advice from an estate appraiser in Napa County, CA, look no further than County Appraisals Inc. for all your appraisal and planning requirements.

So, what affects your mortgage? Read on to learn more about some of the key things that may impact your mortgage rate, for good or for ill.

A quick refresher

Mortgage rates have a long reach into the future of your property: they affect the price you’ll pay to finance its purchase. Low interest rates might be good for you, but they can present a greater risk for mortgage lenders. If you’re a good candidate for a loan (low-risk, no history of default), this will work in your favor, regardless of how high or low the interest rates currently are. There are a variety of factors that can affect mortgage rates. Here are two very important ones:

Inflation

This word gets bandied about a lot, and with good reason: inflation is an important factor to consider for all aspects of your property and business. In simple terms, inflation means an increase in prices, and that means purchasing power goes down in the economy. This, in turn, causes mortgage lenders to raise their rates to make sure their purchasing power remains profitable. Here’s an example: If your current mortgage rate is 5 percent, and that is increased by 2 percent due to inflation, your mortgage lender may raise your rates by several percentage points to compensate for that loss.

Housing market

Here’s another common set of words you’ve probably heard: supply and demand. This applies to the housing market’s response to economic influences, which can raise or lower your interest rates. For example, the demand for mortgages may diminish if unemployment and inflation rise, or if builders are unable to keep their businesses afloat, which means your mortgage rate will be worse. On the other hand, rates may be more favorable if more properties are on the market due to foreclosure, and fewer new homes are being built.

The Federal Reserve

The Fed, meanwhile, has an extremely important, if slightly indirect, influence on mortgage rates, as it adjusts how much money is in circulation. If more money is added, interest rates go down, and if less money is in circulation, rates go up.

A knowledgeable estate appraiser in Napa County, CA, such as County Appraisals Inc., can help you navigate these economic influences and many others. Whether you need advice about estate planning or purchase negotiations, or want to have your property appraised, we’ll work with you every step of the way to provide expert assistance and advice. Give us a call today to see how we can help. We look forward to assisting you soon!

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