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A Resource For Home Buyers

We want to be a one-stop home buying resource for you, and one way we’re doing this, is by providing helpful tips and information about the mortgage industry, buying and selling your home – and many other useful topics that you’ll likely encounter on your path to home ownership. We’re confident that you’ll learn something new every time you visit this page.

FOMC moves federal funds rate to 2-2.25 percent

The Federal Open Market Committee surprised few when it announced the third rate hike of the year. The federal funds rate now lies at a range of 2-2.25 percent, according to the statement released following the meeting held Sept. 25-26.

The move was long anticipated by economists, and the FOMC hinted at one more rate increase coming before the end of the year, CNBC reported. Next year, rates could rise even more. There are two more meetings in 2018, and the next Federal Reserve meeting will be Nov. 7-8.

The federal funds rate doesn't directly impact consumers, but it does encourage changes for interest rates on popular financial products, like mortgages, personal loans and credit cards.

Here's what the average consumer should know about this rate hike and any others that come in the future:

Your loans could get more expensive

If you have student loans, credit cards, mortgages, auto loans or another type of debt, review the balances and interest rates. If you have a fixed rate, it won't change unless you refinance the loan.

Variable rates, on the other hand, change periodically according to market conditions. As the federal funds rate goes up, it's likely that variable interest rates will, too. One way to avoid this is by refinancing to a loan with a fixed interest rate. This may incur an increase but would prevent further increases after that.

Savings accounts could become more valuable

Interest rates are also applied to savings accounts, certificates of deposit and money market accounts, giving consumers the opportunity to build their wealth over time.

If you already have an interest bearing account, consider making some contributions to it in the coming months to increase the amount you earn in return. The more you have stored in your savings account, the bigger the interest payments you'll receive.

If you don't have a savings account that earns interest, now is a great time to begin saving. The Federal Savings Bank can help you set up a savings account, certificate of deposit or money market account.

Consider your options before taking out a loan

Before making the decision to take out a loan, consider whether the loan is really necessary. If you're taking out a personal loan to make a big purchase or investment, carefully weigh the pros and cons of this decision. Higher rates mean the loan may become more expensive as time goes on.

If the loan is necessary, such as if you've been saving to buy a house or a car, it may be best to act sooner rather than later. This way, you may still be able to take advantage of the relatively low rates available now. To get the process started, reach out to The Federal Savings Bank.