Interest Rate
As you may have heard yesterday the Federal Reserve as well as countries around the world worked in unison to lower key short term interest rates in an attempt to ease the world credit crisis. The Federal Reserve lowered their Federal Funds Rate by 1/2 % to 1.5%.
How Does This Affect You ?
It is important to remember that lowering the Federal Funds Rate has no direct impact on long term mortgage interest rates and sometimes it can cause an upwards move in rates. Lowering the Federal Funds Rate will have a direct impact on credit cards, auto loans, and other short term loans. The move is designed to help ease credit around the world and make it easier for lending institutions to borrow short term money and turn around and loan that same money back out. This is a good conversation point you can make with your talking circles as most people think this interest rate cut lowers their mortgage rates. Secretary of the Treasury Paulson also stated that it is imperative to get the housing market back on track and the way to do that is to make sure there is home loan funds available. I see this as a very positive posture by the government which should result in an easing of home loan requirements.
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