Fed Cuts Fund Rate

As you probably already know, the FED cut the fund rate yesterday. What does that mean? Well, it affects short term rates (ARMs, HELOCs, and credit cards) that use the Fed funds rate as an index. It doesn't directly impact 30 year fixed rates on mortgages, though. Over the last 7 years there has been no direct or inverse relationship between the 30 year fixed rates, and the Fed funds rate (e.g. in Jan 01 the fed funds rate was 6.01% and 30 year fixed was at 7.03% by Dec 01 the Fed fund rate was all the way down to 4.25% and the 30 year fixed rates were up to 7.07%). There is a lot of uncertainty about what the Fed's move will do in the marketplace, although one thing is for certain: there is a lot of volatility. If you are waiting for a better 30 yr fixed rate, you could be waiting for a very long time. Historically (that is in the last 20 years) rates are very low. They have been as high as the high teens). If you would like a mortgage consultation, contact a reliable mortgage lender. Contact me if you would like to get the name and number of one!