Higher interest rates are coming, and could make life even more difficult and expensive on Long Island.
The Fed’s Janet Yellen has reaffirmed that interest rates are likely to be hiked in March 2017. That is just one of what could be several increases coming this year. While on one hand it is a sign of positive growth in the economy, it could also add to the financial burden of LI property owners and residents.
Long Islanders are already reeling from the recent frenzy about property tax rates and over bloated bills. On top of that it is tax time, and New Yorkers are dealing with worry and threat of new income tax rules which some pose may cause further hardship in the short term. Now a new era of rising interest rates is almost certain to add the high cost of living here.
Interest rates may most noticeably impact mortgage payments. That means higher payments and more difficulty qualifying for loans to buy homes, refinance them, and to access equity. Those with adjustable rates loans and lines of credit will also feel their payments going up.
What many aren’t expecting is the impact of higher rates on everything else. That all trickles down to the price of gas, food, and more. Jobs appear to be coming back, but most are not seeing their wages rise as quickly. These should be very familiar dynamics to what was experienced in the months leading up to 2008. Positivity is a good thing. Yet, it is smart to be prepared, and to ensure those mistakes and consequences are not repeated.
To combat this compression of finances Long Islanders may be wise to refinance home loans now and lock in low fixed rates, pay down higher rate debt, and appeal their property taxes.