The Federal Government cut the Fed Funds rate by 1/4% on yesterday, hoping to have a favorable affect on the economy.  The usual initial reaction on Mortgage Interest rates is a decline in Bond Yields and an increase in long term rates.  Yesterday, however, the immediate reaction was higher Bond Yields and a pleasant surprise of an afternoon price decrease in Mortgage Interest Rates.  We don't know if this will hold through today, but as of 9:00 the Bond Yields were up 25 basis points - another positive sign for improved mortgage rates.

With all of the recent FNMA and FHLMC changes to interest rate calculations based on credit scores below 740, FHA has become a hot loan for many borrowers.  For borrowers with credit scores below 640, FHA can even offer a lower APR with a 20% down payment.  Call me if you don't like the interest rate that is offered to you based on your credit score and let me find you the best interest rate possible.