How does the rate drop affect you?

Yesterday was a wild day in the financial market with the Fed cutting 3/4 of a point off of the federal funds rates. The big question everyone is asking is "how will this affect me?". Hopefully I can give you a little guidance of what to expect next. First off, a drop of the Fed rate is not directly tied to mortgage rates. Mortgage rates are indirectly tied to the yield of the 10 year bond market. In spite of that, yesterday saw a decline in mortgage rates to levels such as 5.125% or 5.25% for a 30 year fixed conforming loan. If you are in the buying process currently, it would be a smart move to lock in this low rate. The last time the Fed made a major cut, mortgage rates dropped for a few days and then crept back up to the previous levels. If you need a mortgage contact, I have several preferred lenders and would be happy to pass their names to you, you can reach me at 209-9667 or rsandin@prucar.com.

I am attaching a link to bankrate.com which gives a great oversight on the entire situation. Over the coming weeks, you can expect rate drops for home equity lines and variable rate credit cards but for mortgages, we will have to wait and see what happens next.

http://www.bankrate.com/brm/news/fed/main-jan2008.asp

Right now, with the larger numbers of homes on the market and interest rates in the low 5% range, it could not be a better time to go after that first home or to make an upgrade. Please let me know if I can be of any assistance.