WASHINGTON - The Federal Reserve said on Wednesday that it would raise short-term interest rates for the first time since the financial crisis, a decision it described as a vote of confidence in the American economy even as much of the rest of the world struggles.

The widely anticipated announcement - that the Fed would raise rates to a range between 0.25 percent and 0.5 percent - signals the beginning of the end for the central bank's stimulus program. Fed officials emphasized that they intended to raise rates gradually, and only if economic growth continues. Short-term rates will rise by about one percentage point a year for the next three years, Fed officials predicted.

Interest rates on mortgages and other kinds of loans, and on savings accounts and other kinds of investments, are likely to remain low for years to come.

[...]

The decision "recognizes the considerable progress that has been made toward restoring jobs, raising incomes and easing the economic hardships that have been endured by millions of ordinary Americans," Ms. Yellen said. The Fed's announcement came exactly seven years to the day after the central bank cut its benchmark rate nearly to zero.

1. How much will my monthly payment increase?
    
   
2. How much will it cost me to make this transition?
    
3. How much of a mortgage do I need to become qualified for?
    
4. What happens if I add in some extra money beyond the proceeds of my home sale?

So many questions -- all very helpful to think through, calculate and discuss.  The worksheet above can help you think through those numbers -- and it is available here as an editable Excel file.  Enjoy!

• How much money you could borrow to purchase a home.
   
  
• How much money you want to borrow to be comfortable with the monthly payment.

• Joe Slagell  ::  Park View Federal Credit Union  ::  540-246-1004
   
  
• JoDee Lambert  ::  SunTrust Mortgage  ::  540-421-5745

• LOW:  4.5% - 5.0%
• SUPER LOW: 4.0% - 4.5%
• ABSURDLY LOW:  3.0% - 4.0%

As you can see above, interest rates have spent the most time in the ABSURDLY LOW category over the past years -- and apparently interest rates will be going up "soon, but not now" per a Washington Post article about the recent Federal Reserve meeting....

The Federal Reserve made few waves when its top brass met in Washington last month for their regular policy-setting meeting. Its target interest rate — pegged at zero since the financial crisis — remained unchanged, and the central bank's official statement offered few clues of when it might rise.

But the minutes of the July meeting, released Wednesday afternoon, show that Fed officials were busy making preparations behind the scenes as they inched closer to increasing the benchmark rate for the first time in nearly a decade. Many economists and investors think the Fed could move at its meeting next month. The minutes made clear that officials needed more data before deciding — but also that they wanted to ensure everything was ready to go if they did.