You might have heard the news about The Federal Reserve cutting the Fed Funding rate to zero! There has been a lot of fear and misinformation going around about this. I wanted to take a few minutes to explain what that means and how affects mortgages.
1. Mortgage interest rates have NOT been dropped to 0%. The quickest way to explain this is that the Fed Funds Rate only impacts the interest banks charge on short-term financing. Think of credit cards, HELOCs, and auto loans for example.
2. If you are in the process of purchasing a home or refinancing you are fine! If you have locked your rate, your loan will continue to be processed and everything will be fine. If you have not locked or are in the process of shopping for a loan/refi, I would get all your paperwork into the lender. This will allow you to be ready when rates naturally adjust. Having a lender, you like and trust is advisable as the current rates are about a half point higher than they were just a couple weeks ago. This is due to the influx of refi’s. There are so many refi’s happening right now the industry as a whole doesn’t want any more for the next few weeks, to allow time to process the files they currently have.
3. What you need to know above all else is that you have a highly trained, highly capable adviser in your corner to answer any and all questions you may have regarding what’s going on with mortgage rates. Please feel free to reach out with questions, but also make sure that you’re following my social media feeds as I will publish regular updates regarding market changes and advising clients directly on their options concerning rates and programs.
4. Mortgage rates are tied to the activity of the 10-Year Treasury bond (Bond) and Mortgage Backed Securities. The 10YR Treasury and average 30YR Fixed rates move in sync. Rates continue to move up and down on a daily basis. This is where working with the best of the best is important as they know how to time locking your rate and can give you the best possible advice.
If you are going to be doing anything with your mortgage or working to purchase a new home in the next few months don’t hesitate to reach out. Even if you don’t plan on using me as your real estate agent, I want to make sure I am pointing people to the best possible lenders to help guide you! As always if you need anything at all please don’t hesitate to contact me.
Also please remember to treat everyone with respect and help your fellow neighbors, as we will all come through this better if we are helping each other!
Lake Bishop – Broker Owner
#1 Selling agent in Green Valley Ranch
Certified Military Residential Specialist
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