What is going on with interest rates?You’ve probably seen the headlines that the Fed lowered rates to 0%. What they actually lowered was the Fed Funds Rate, which is the rate that banks charge each other to lend reserve funds on an overnight basis. So, it is an indirect component of mortgage interest rates, but it doesn’t mean that mortgage rates are 0%. The most significant part of the Fed’s announcement is that it committed to putting $200 Billion into the mortgage-backed securities market, and this is really what will help interest rates.
How does this affect homebuyers?Interest rates are going to continue to be very volatile. That means they may change very quickly, and you may see them change by a good amount on a day to day basis. However, whether rates go slightly up or slightly down, it’s still creating a tremendous opportunity for you to lock in cheap money for the long term. If you…
- Own a home and have credit card debt, consolidating from the average credit card interest rate in the high teens to a lower mortgage rate can be life-changing!
- Are renting a home but would like to build equity and position yourself for long term financial success, you can afford more home right now than at any time in the past decade!
- Are currently working with a loan officer and are wondering if you should lock in the rate or try to wait to get a better rate, it might be best for you to play it safe and lock in a rate you will be happy with 2, 5, 10-years from now.