The Fed Cut Rates and The Phone Rings Off The Hook.....
It's your Pipeline....
Your borrowers are calling and saying I locked in my rate last week at 5.5% and the Feds just cut rates .50%
do we now get 5.0%????
the simple answer is NO!!!
Most people don't understand what rate cuts effect:
Who will benefit from the Feds rate cut?
If you have a loan that is directly tied to the Prime Rate, you will see an immediate benefit. Home equity lines of credit (HELOCs)and variable rate charge cards are the types of loans that will have an interest rate decrease, other loans that are effected are person lines of credit, car loan and of this sort.
What does the The Fed Rate Cut mean for long-term rates?
Long-term mortgage rates, the lowest we've experienced in years, they actually increased after today's cut, based on historical performance and recent trends.
So if you're waiting for long-term rates to fall further, don't hold your breath. Mortgage rates are at the lowest levels now since 2005. Get your mortgage application in process now and lock in a great rate before it's too late for a home purchase or refinance.
What Drives Mortgage Rates: Fixed-rate mortgage rates are not directly tied to Fed interest rate moves. Mortgage rates tend to follow in the direction of other long-term government bond yields, such as the 10-year Treasury, which historically moves in accordance with the economic outlook and in advance of Fed actions. The performance of Mortgage Backed Securities, issued by Fannie Mae and Freddie Mac, is what really determines long-term mortgage rates.Typically what happens is investors of stocks start to take money out of the stock market when unsettled news hits, these investorsstart putting their money into Treasury Bonds, the bond yield starts to go down as more money is poured into the Treasury Bond market which then causes mortgage rates to drop, when the stock market rebounds investors start putting their money back into the stock market and out of the bond market, this causes the bond yield to go up which drives mortgage rates up.
Mortgage rates are near all time lows, Purchase a home or Refinance now and take advantage of these low rates!
Leo Namiot
Benchmark Mortagage
Connecticut Mortgage Lender
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