Interest rates are set to rise, experts say. And that increase will likely have a negative effect on mortgage lenders and borrowers and hinder home value appreciation, a local mortgage-lending firm told Miami Today.
However, local economists and bankers said a slight increase in interest rates would benefit some banks.
According to reports, the federal funds rate may rise in mid- to late-2015.
“I think it gives the Federal Reserve more reason to be cautious and not raise interest rates too quickly,” said Richard Dailey, president and CEO of Apollo Bank.
In practical terms, the owner of a home valued at $222,800, the median value for Miami-Dade according to Zillow, currently pays a monthly mortgage of about $1,746 including escrow and insurance. In other words, roughly 43 percent of the area’s median monthly gross income.
If interest rates rise by 1 percent, then 47 percent of the homeowner’s monthly gross income would be dedicated to mortgage payments, according to the newspaper. [Miami Today] – Christopher Cameron