It’s official. The Fed has officially cut the Fed Funds Rate to .25% (actually a ‘target range between 0% and .25%). This is BIG news.
No, mortgage rates are not zero percent. However, intially (this happened half an hour ago) mortgage rates look like they could be poised for a great deal! I’m not in favor of locking right now either though. Let’s see what happens with this.
I wish I could tell you a rate, but with lenders slow to re-price with all of the volatility.
Based on what I can tell, mortgage rates look like they might go to as low as 4.5% on a 30 Year Fixed loan (best case scenario). Here’s the catch, this stuff doesn’t last long. If you haven’t made the call, make it. This won’t last forever.
One of the biggest pieces of this announcement was that the Fed will continue to buy mortgage backed securities (what mortgages are funded by) and they will continue to do it in a big way. Traders like that, therefore they’re putting their money where the Fed’s mouth is.
If you have questions, feel free to reach out to me. Again, don’t lock. Have someone monitor things. If they have access to live bond quotes (that’s how I know mortgage backed securities are currently up 100bps), they’ll know when rates look like they’re headed higher before lenders issue new rate sheets.
If you’re shopping around right now (if you’re not, you probably should be), here are some questions you should be asking:
- What are mortgage rates based on? (Short Answer: Mortgage Backed Securities)
- What is the next economic report that coule be coming up that could cause a move in interest rates? (Short Answer: I blog about it on wealthwithmortgage.com)
- Do you have access to live, real time bond quotes? (If they don’t know what this means, run in the other direction).
Make sure you’re working with a pro. In times like these it’s important to know that the person assisting you is more interested in saving you money and not just putting some in their back pocket.
Remember when I told you to NOT LOCK a rate on a refinance a few weeks back when everyone else was? Yea – it’s stuff like this that I’m looking for. They don’t last forever though. Get your mortgage on someone’s radar NOW!
I’m always happy to help.
