The Federal Reserve cut rates on October 29th to 1% to help the struggling market, but how does this help the consumer?
This is lowering the short term interest rate which in turn will cause banks to lower their prime rate, usually within a few hours or days. This directly affects most car loans, credit cards, student loans, home -equity lines of credit, and home equity loans (aka second mortgages). The one type of loan this does not directly affect is the fixed rate mortgages many people use to purchase homes. These loans are tied to the 10 year treasury bound which fluctuates based on economic outlooks and/or inflation. What this means is even if the Fed lowers short term rates fixed mortgage rates can go up or down, and with this cut they did take a modest up tick.

Arm's, Adjustable Rate Mortgages, are influenced by either Treasury averages or LIBOR depending on the loan and bank; Therefore, many of these loans lowered by their next adjustment in November. These are the basic principles that cover the majority of consumer loans but in no way encompass all loans products available.


Let's hope this helps the struggling market because with the rate now at 1% there is not much lower it can go.
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Joey Remondino is a full time Realtor and Broker Specializing in residential homes in Northern Virginia including Prince William, Fairfax, and Fauquier Counties. Trained and experienced expert in Relocation, Short Sales, REO's, foreclosures, investments, and any other residential real estate. Joey can guide you through the home buying or selling process.