Yes the Feds cut the rate again but you need to know is this going to benefit you? You may have though of refinancing your home loan and are not sure what is the best move for you. It is important to know that a fed cut does not automatically impact the long term 30 year fixed home loan rate. You may not get what you are looking for by refinancing, so it is important to look at all of the facts.
It is important to first understand that the feds have cut the Fund Rate which is the rate at which banks lend each other money. Now usually when this happens the Prime Rate will also be lowered, but what does that mean for you and me? Basically that any type of loan that is tied in with the prime rate will be affected, for example you usually see short term loans affected by this, such as a Home Equity Loan. Know that when this rate is cut it also impacts the rate of interest you can earn in a CD or a savings account.
Long term mortgage rates are usually more affected with bonds and how the bond market is doing. Just because we have heard that the feds have cut rates does not mean it will positively impact you. Remember that when they lower the rate they are trying to stimulate the economy and a good economy will always be good for real estate.
If you are in the market for refinancing or getting a new home loan it is important to check with you loan officer and get the best rates that are available to you, remember they change daily.
Author Source: Bryan Burbank
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