The Great American Puppet Show, Finale!

Mortgage and Lending with Union Home Mortgage Corp.

A few weeks ago we talked about the Fed Rate Cuts and how they would effect mortgage rates.  I will not bore you with a recap but bottom line is that when the Fed lowered rates we would see mortgage rates rise.

What? What's that you say? Rates will rise?  But the media continues to say how great rates are because the Fed lowered rates.  The little man is dancing on my computer telling me the Fed lowered rates and the time to act is now.  Well....... The little dancing alien is wrong just the like the man on the TV.  Since January 23 (around the time of EMERGENCY RATE CUT) Mortgage Backed Securities have lost about 350 basis points.  What that means in rates is that we have gone from a bottom of about 5.375% on a 30 year fixed rate mortgage with no points to about 6.375% in less than 30 days.  It amazes me that we still have people convinced they made the right move by waiting " 'cause the fed is going to drop rates again soon."

This is a call to arms (not adjustable rate mortgages) to all real estate professionals. Please, Please, Please, when you see or hear someone spouting off about mortgage rates going down because the Fed is lowering rates CORRECT THEM.  You do not have to be a complete expert. Heck, you can even say "I do not believe that is true" and point them in the direction of your favorite loan officer.  Hopefully they are not sounding the Fed horn themselves...................

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Rick Pilger