Act Now, Before the Fed Does

The Federal Reserve is scheduled to meet this week and announce its new Policy Statement and Interest Rate Decision Wednesday...and will cut the Fed Funds Rate once again. This is no big surprise. Throughout 2008, the Fed has lowered key interest rates in an effort to stimulate the economy – including cuts in its Fed Funds and Discount Rates earlier this month in an unscheduled meeting. As we know however, cuts in these interest rates do not translate into lower home loan rates. In fact, they typically move in the exact opposite direction. That's the reason I wanted to share this information with you today. If you want to secure a lower mortgage rate, the best time to act could be before the Fed meets and announces its latest cut. In the chart below, notice the pink line. That line represents the interest rate the Fed impacts with its financial policy. As you can see, the line has been consistently lower since January. The blue line, which represents 30-year fixed-rate mortgages, shows that mortgage rates have risen since the first Fed rate cut announcement. So don't wait until Wednesday. Whether you're considering buying a home or refinancing your existing property, call me today. We'll review your individual situation and see what's best for you and your family. And don't believe the hype about credit being impossible to get. Credit standards for many loans have tightened up, but mortgage money is widely available on home purchases for borrowers who can provide documentation and support their mortgage application. And even if you don't have a home loan need at the present time, feel free to check in with me anyway. We can discuss your current situation, plan for the future, and make sure you are in the best possible position for any financial needs that may be coming down the road.