When are mortgage rates going down.?
The fed has cut the interest rate to 2% but the consumers still are getting the 5.5% on the 15 year fixed.
I hear it takes some time for the effect to be felt, somewhere i read it should come down by the failure of the year is that true.
Answers:
"Biggie" is right on. Fed rates don't affect mortgage rates nearly as much as long-term bond rates.
The interest rate the feds cut has terrifically little to do with mortgages. This rate is for short term money. Whatever interest rate you look at that the feds cut will NEVER be the interest rate of mortgages. This interest rate is the rate that the investors borrow money from the feed, not the interest rate that the investors charge for loans!
Although it is true that the federal funds rate is 2%, other answers have told you that mortgages will never approach that level and they are right.
It is also true that this rate have no direct bearing on mortgage rates. Mortgages (especially 30 year fixed ones) tend to track the 10-year bond. If, as an investor, you could get a establishment guarantee on that money for 10 years, you would versus taking the risk and loaning that money to someone as a mortgage where you 'hope' that you get rewarded back.
As important as the actual federal reserve interest rate is, it is expectations that also fuel how much a mortgage costs. If the expectations are for further cuts, mortgage rates person in charge down. If the expectations are (as they are today) that the rates are going to go up, much higher to control inflation, after the mortgage rates reflect that sentiment long before it become policy.
I wouldn't expect the fed to increase much before the see, but they might have to as inflation pressure creeps into the economy from increased food and fuel costs (yes, I know the core CPI strips these out, but fuel costs will cross over into other costs).
I would expect a mortgage to cost more by the come to an end of the year and even more a year after that. Today's mortgage rates, although higher than the recent past, are still VERY low considering the closing 30 years.
good luck!
Not anytime soon.
The banks are using the lower rate they borrow at to boost their profits and make up the losses they incurred surrounded by the last year of sub prime foreclosures.
our office is thinking about 2010. The rates will not turn down anytime soon Source(s): Loan Modifications/ Foreclosure specialist
fed rate doesn't directly affect mortgage rates - rates bottomed out awhile ago - if you can win 5.5%, grab it, because you probably won;t see it that low again for years
Related Questions:
What mortgage company have the best refinancing rates within Ohio?
your going to lose more time and money shopping too much, rates are low right now. Pick an honest lender, then shop the rate, if it go lower ask the lender to lower their rates. I'd advise staying away from brokers,...
I hear it takes some time for the effect to be felt, somewhere i read it should come down by the failure of the year is that true.
Answers:
"Biggie" is right on. Fed rates don't affect mortgage rates nearly as much as long-term bond rates.
The interest rate the feds cut has terrifically little to do with mortgages. This rate is for short term money. Whatever interest rate you look at that the feds cut will NEVER be the interest rate of mortgages. This interest rate is the rate that the investors borrow money from the feed, not the interest rate that the investors charge for loans!
Although it is true that the federal funds rate is 2%, other answers have told you that mortgages will never approach that level and they are right.
It is also true that this rate have no direct bearing on mortgage rates. Mortgages (especially 30 year fixed ones) tend to track the 10-year bond. If, as an investor, you could get a establishment guarantee on that money for 10 years, you would versus taking the risk and loaning that money to someone as a mortgage where you 'hope' that you get rewarded back.
As important as the actual federal reserve interest rate is, it is expectations that also fuel how much a mortgage costs. If the expectations are for further cuts, mortgage rates person in charge down. If the expectations are (as they are today) that the rates are going to go up, much higher to control inflation, after the mortgage rates reflect that sentiment long before it become policy.
I wouldn't expect the fed to increase much before the see, but they might have to as inflation pressure creeps into the economy from increased food and fuel costs (yes, I know the core CPI strips these out, but fuel costs will cross over into other costs).
I would expect a mortgage to cost more by the come to an end of the year and even more a year after that. Today's mortgage rates, although higher than the recent past, are still VERY low considering the closing 30 years.
good luck!
Not anytime soon.
The banks are using the lower rate they borrow at to boost their profits and make up the losses they incurred surrounded by the last year of sub prime foreclosures.
our office is thinking about 2010. The rates will not turn down anytime soon Source(s): Loan Modifications/ Foreclosure specialist
fed rate doesn't directly affect mortgage rates - rates bottomed out awhile ago - if you can win 5.5%, grab it, because you probably won;t see it that low again for years
Related Questions:
What mortgage company have the best refinancing rates within Ohio?
your going to lose more time and money shopping too much, rates are low right now. Pick an honest lender, then shop the rate, if it go lower ask the lender to lower their rates. I'd advise staying away from brokers,...