Your Questions About Mortgage Rates Today

Susan asks…

How long after a change does it take for the fed prime rate to affect the lending rantes offered on mortgages?

The fed cut rates today 1/22/2008 by 75 points, but I checked rates offered on mortgages today and found that they have only dropped slightly. How long does it take before mortgage rates change with the fed prime rate cut?

admin answers:

It doesnt change mortgages. Ive answered this question many times today but it doesnt affect mortgages.

It wont affect it, sometimes it can make it worse. Mortgages are sold like Oil, or Corn ect. They are sold on the open market. If China, Japan ect decide they dont want to buy mortgages anymore the rates go up.

The Fed doesnt control mortgage rates. The people that buy mortgage backed securities do.

People that think the Fed controls mortgage rates are wrong. Its like thinking the feds lowered mortgage rates and now the price of corn should go down. Its the same thing.

Its purely a market decision not a fed decision. Rates went down today because of what happen to China’s market yesterday. It had nothing… Absolutely nothing with what the Feds did.

Thats how it rolls.

Robert asks…

Should I lock in my 30-year fixed mortgage interest rate today?

Today is Wednesday, 10/08/2008. This morning the Fed dropped interest rates by 0.5%. I was quoted 6.5% in good faith when I started. Last week the markets were horrible, and my floating rate went all the way down to 6%. Now, it’s right back at 6.5%! I have exactly 2 weeks to lock in my rate. I am afraid that, if I wait, I will be forced to pay an even higher rate than what I started with. Please advise.

admin answers:

When you wait for rates to drop you are gambling that they will not go up.

The feds lowered the rate today,so if it was me, and it is your money I am gambling with, I would wait. The lenders will feel the drop soon, therefore passing it on to you.

Thanks for allowing me to gamble with your money, it felt so good.

I would be interested to know how this came out please let me now via e-mail.

I hope this has been of some use to you, good luck.


Betty asks…

how can i take advantage of todays low mortgage rates???

i want to build or buy a house but havent found one or havent found a place to build one yet. i want to take advantage of these low rates right now. is there anyway i can start paying on a mortgage now and lock in my interest rate, then when i find what i want i would have this low interest rate and already have paid some on it????? or is there a way i can get a say 200,000 mortgage, put the money in a cd, then when im ready i could take the money out, use it to pay for the house.

i know someone is going to say to just put howevermuch money the payment is going to be, and put it in savings then when im ready, i would have that savings for a bigger down payment, and that would offset the cost of having a higher interest.

well thats just too hard to do for me. its easy for me to make payments but real hard to put money in savings. any suggestions????

admin answers:

You can’t take advantage of today’s low mortgage rates without a piece of property…The problem is that the mortgage is a secured loan that uses the property as collateral…That’s why its interest rate is so much lower than personal/unsecured loans.

James asks…

Do mortgage rates usually drop during the week?

I’m locking a rate this week and was shocked to find rates jump over the weekend. I’m really worried about the senate issues, and I’m thinking about locking today in spite of this.

However, I know rates tend to get lower as the week goes on.

I know anything can happen. Any wise thoughts?

admin answers:

Not this week. Not unless the morons we elected to govern us get this deal done.

Then you may see a small return.

Richard asks…

How will another rate cut by the Fed affect mortgage rates for the near term?

I’m looking to buy by Dec, are mortage rates going down if the Fed cuts them today?

admin answers:

If they cut, some of that should be passed through. I don’t believe that rates are going to stay low for long though because credit will remain tight in the market.

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