Fed Cuts rate, Prime now 4%!

Mortgage and Lending with Your IRA guy!

My Notes

Wow!  So much has happened recently....so, in trying to keep positive about this industry, I will say that there are some great housing deals out there for buyers.  Other than that, well, you read the paper....(which BTW, is bad because it's all negative press)

 With so that negativity all around us, lets look at a few positive's.....

  • We are alive
  • Most of us are somewhat healthy
  • Housing prices are low
  • Now's a great time to buy real estate!

Gas-Everyone can thank me for gas prices coming down.  I sold my Durango right after I filled up the tank at $3.89-now look at us a few weeks later!  if I hadn't of sold, gas would have still been in the $4 range (Murphy's law)  :)

Prime back down to 4%

Greenspan still doesn't admit that, in one hand he was warning how so many people had adjustable rate mortgages and they could be in trouble when they reset...yes, on the other hand, he raised rates 14 consecutive times and THAT my friends is what caused the sudden housing bust-Yes, there was a correction coming (slowly) but with all of those mortgages resetting so high and at the same time, it had like a tsunami effect..... Just look back to some of my other newsletters  with me denouncing his decisions to continue to raise rates.......


  • Federal funds rate is what banks charge to one another for overnight loans.  The federal reserve board controls the federal funds rate.
  • Prime rate is simply the fed funds rate + 3% and is tied mainly to credit card and home equity rates
  • Mortgages are traded on the stock market in bond portfolios-market supply and demand dictate first mortgage rates NOT what the federal reserve board does.

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