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Market Report Update - Feds cut RATES !!!!! Do you know which rates though?

Mortgage and Lending with Social Media - Infinity Home Mortgage Company, Inc

October 08, 2008 05:59 AM

warning earning warning

WARNING.... WARNING...... WARNING.....

This is not to say that mortgage interest rates have dropped today. Sometimes in the past, mortgage interest rates did become lower in weeks after the Fed dropped the fed rate. There have been times when rates went up. There are many variables for these two factors to take place. Sometimes rates were lowered previously to the Fed lowering the discount rates because Wall Street had a good idea that the Feds would lower the Fed Rate.

But then there is the discount rate which is for short term lending. The interest rates for mortgages are when it comes to financing your property which are considered long term rates.

Overall, there is mass confusion to why mortgage interest rates rise or fall. And just this news alone will have the phone ringing asking their loan officer if they can get the lower rate. But wait, rates actually have increased today, even after this news. Please click here to read further to understand why rates move..... (this opens up into a new window)

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For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!!

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Vickie Slade

Colorado Landmark, Realtors - Boulder, CO

Service You Can Trust ~ Someone You Can Depend On

Jeff, good word of caution for us all to remember. It will be interesting to see what actually does happen with the mortgage rates after this cut, particularly with the markets in such a mess right now, including most of the markets around the world.

Oct 08, 2008 06:04 AM

Anona Large

Realty Executives Associates - Oak Ridge, TN

Oak Ridge, TN Real Estate

I find this is one of those subjects that are hard to explain the the "common" person. This post is a very short and sweet description of this question.... Thanks!

Have a Fabulous Real Estate Day!

Anona

Oct 08, 2008 06:34 AM

Jason Sardi

Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC

Your Agent for Life

Jeff: This is yet another common misconception about Mortgage Interest Rates. In this atmosphere, it seems almost impossible to accurately predict where rates are going to be one day, one week, one year from now. Interesting economic times we are in, eh?

Oct 08, 2008 06:34 AM

John Cannata

214-728-0449 http://TexasLoanGuy.com - Frisco, TX

Texas Home Mortgage - Purchase or Refinance

Jeff - Don't you wish you had a dollar for every time a homeowner called you thinking the rates dropped because of this announcement? You would not need to close loans, just take the calls inquiring.

Oct 08, 2008 06:37 AM

Tim and Pam Cash

Crye-Leike (Sango) - Clarksville, TN

Real Estate Professionals - Clarksville TN

Jeff, to the uninformed it would look like that. I would hope that someone would realize soon that reducing the fixed rate would do more good than harm at this point and time.

Oct 08, 2008 10:30 AM

Renée Donohue~Home Photography

Savvy Home Pix - Allegan, MI

Western Michigan Real Estate Photographer

Thanks for splanin this! I really like the new pic: "Jeff Belonger Goes to Washington"

You look like you're running for something. Kinda hot actually :)

Oct 08, 2008 12:16 PM

Randy L. Prothero

eXp Realty - Hollister, MO

Missouri REALTOR, (808) 384-5645

I sometimes think the Fed does not know what causes mortgage rates to rise and fall.

Oct 08, 2008 12:49 PM

Frank Marta

Nuhome Mortgage - Houston, TX

Texas Home Loan Specialist NMLS#: 245813

This is true very clear and easy to understand. Many clients call to check on there rates to take advantage of the lower rates but this doesn't really help the consumer in most cases... Great post.

Oct 08, 2008 02:25 PM

Jeff Belonger

Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ

The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

VICKIE..... the rates will just go up and down on a weekly basis... it will come down to luck at times, when locking in. In some cases, you might be best to wait until the last week... then again, if you gain a little in rate and you are a month out, you should just lock. To me, because the market is very volatile, you should not take that chance.

ANONA....... it's very hard to the common person. Whats even harder is when you lock them into a rate, rates go down, and then they want even the lower rate. I just tell them, what happened if you locked in and rates went up? Would you want me to come back to you and raise the rate? You should hear their answer then. It comes down to many of the loan officers out there that don't explain the truths of when locking in, what rules have to be followed, and not misleading the consumer, just to keep them in the pipeline, until it settles.

JASON..... it's very hard... and I am getting tired of the many of loan officers on AR, that subscribed to a pay service to tell them where rates go. They just copy and paste, making it sound like they are geniuses. And half the time, when I see them tell the consumer to float or to lock, rates go the opposite. hence your point that they are very hard to predict.

JOHN...... If that was the case, I would have been a millionaire after 16 years... lol

TIM & PAM....... I really don't think lowering the Fed Rate now would really help us even short term. I think it's a 2 day quick fix.... we'll see come Monday. Compare the stock market and bonds that I mentioned in my post that I linked to. We'll see what direction this could be heading in then. I think the moves that they have been making recently will hurt us both short term and long term. It's like a junky getting a quick fix. Just my opinion...

RENEE...... my pleasure and thanks for stopping by. In regards to your second comment... I am now blushing, since this is coming from a sexy realtor. ;o) Bring it on baby...

RANDY..... I am sure many don't know either... and right now, it's almost hard to put a finger on it, no matter how much data that you read up on. Its a flip of a coin now.

FRANK...... I am glad it was easy to understand... hence why I tried to make it short and to the point, without large words and anything outside of the normal business vocabulary. thanks for the compliment.

Oct 08, 2008 03:42 PM

Bo Hussung

Bell Title /Triserv LLC - Nashvle, TN

Jeff, a buddy of mine psoted something on this exact subject just yesterday that I rebogged, What a Crazy Market....... Scott was spot on with it. You ought to check it out. It is very informative.

Good post

Oct 08, 2008 11:16 PM

Tom Burris

NMLS# 335055 - Baton Rouge, LA

Texas/Louisiana Mortgage Pro - 13 YRS Experience

Interest rate prognosticators told me this morning to go back to bed and cover my head..... Ruh Roh!!

Oct 10, 2008 03:06 AM

Jeff Belonger

Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ

The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

BO...... I read it.... thanks.... as mentioned, you need to click my link at the bottom of this post. I basically said the same thing as he did... thanks

TOM.... lol... that's pretty funny. As I type this comment on Saturday morning, the rates did bad for 3 days in a row, going into the weekend.

Oct 11, 2008 03:42 AM

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