Before leaving for a quick getaway last Friday, I had a feeling that my car was due for some trouble. Turns out the feeling was justified this time because my vehicle broke down just outside of Brigham City, on my way home from a weekend of fun.

Being a Sunday, none of the local repair shops were open and tow rates were a healthy $3 a mile (plus a $50 hookup fee). Since Brigham is about 50 miles from Salt Lake, that would have made my tow bill $350 (assuming they bill you for the round-trip miles) to tow the car to a shop near my house.

So I decided to have the car towed to a shop in Brigham and crashed in the Howard Johnson off 1200 South, which turned out to be much less expensive than towing back to SLC.

Everyone I met in Brigham was friendly and genuine, which I thought was noteworthy enough to post about. There’s even a taxi service that will take you anywhere you need to go in town for only $5.

Interest rate movements are about as well understood as some of the decisions made by Utah Jazz management.  Most of us can only scratch our heads and wonder why things happen the way they do.  However, that doesn’t mean a quick analysis of change won’t yield some beneficial insight.

What do higher interest rates mean to you?  The question obviously has many follow-up questions that must be answered before any true analysis can take place.

Are you currently looking to buy a home (but without a locked-rate)?

If you own a home, is your mortgage fixed or variable?  Are your payments going to increase in the next three to six months?

Are you planning on selling your home and buying or building a new one?

In an attempt to provide information that is useful in answering each question and similar variants, I want to outline my thoughts sort of like painting a broad picture from which inferences can be taken.

So first of all, higher interest rates immediately translate into higher monthly payments when all else is equal.  Pretty basic – something everybody knows.   However, all else is usually not equal.  If you’re on a variable interest rate, your payments may not adjust for several months, or perhaps they won’t adjust for a couple of years.  You would be wise to find out when your payment might adjust and what it will likely be adjusting to.  You can find out by calling the lender where you send your monthly payments or by visiting their website (in most cases).

If you’re shopping for a home, you might want to lock-in your interest rate soon and avoid any additional upward movements in the rate.  A small move upward can dramatically affect your maximum loan amount, which is dependent on your debt-to-income ratio.  Higher payments mean a higher debt-to-income ratio, which means less purchasing power for you.

Less purchasing power brings us to the point I wish to make next.  It is possible, though it’s only happened once or twice in America’s history, that real estate median prices could fall if interest rates spike up and are sustained for a couple of years or more.  Falling home values can have a major impact on you if you need to refinance out of an adjustable rate mortgage into a fixed rate mortgage or if you need to consolidate some debt.  You’re able to do less when you have less equity in your house.

While it’s fairly reasonable to say that nobody knows when interest rates are going to go up or down or what they’ll do next, it is possible to have a plan of attack once they do make a move.  Right now rates are on the rise and if you’re smart you’ll assess your mortgage situation and act accordingly.

I recently posted about the IRS rescinding tax-exempt status from several non-profits acting as down-payment-assistance (DPA) charities, and how this would hurt buyers with low down payment money and some bumps in their credit.  Well, there’s still at least one DPA organization that is conducting business as usual, with full endorsement from the IRS and the FHA.

Buyers Fund is actually based in Utah – Provo to be exact.  They have issued a news release confirming their status as non-profit, with a link to the IRS website where you can lookup their charitable status on your own, if you like.  I did the search and sure enough, there they were.

(As a sidenote, you can look up the status of any organization that claims to be a charity on that page.  Might come in handy the next time you want to donate to a disaster relief fund of some kind.)

So what this means is that Borrowers who qualify for FHA loans are still able to also qualify for a 3% down-payment-assistance grant from Buyers Fund, making it easier to purchase a home.  FHA is a great program for many borrowers because it allows for dings in credit, has low down-payment requirements, and much better rates than subprime mortgages.  And believe it or not, FHA is one governmental organization that is completely self-funded and has been for many years.

Sports fans will think I’m referring to LeBron James, or perhaps Dirk Nowitzki, but such is not the case.  At least not in this instance.  I’m talking about a strange (and sad) thing that happened this weekend while en route to the movie theater at 3300 S and State.  I saw a man roughing up a woman in an argument on the sidewalk.

After pulling over and talking to the two briefly another car showed up, who had already phoned police.  The cops arrived a short time afterwards and several people filled out witness reports, myself included.  The man was put in the backseat of one of the police cruisers and the woman was taken home by family or neighbors – I didn’t catch who they were exactly.

I am doubtful that I’ll be called in to testify or anything like that, but you never know.  This is the second time I’ve filled out a witness report; the other was a much more dramatic episode that involved an under-cover cop being run over during a drug bust in Provo.

Anyway, the end.  I’ll have more mortgage-related-info soon.