What the FED Cut Means for Your Mortgage
This entry was posted on 1/22/2008 12:44 PM and is filed under Real Estate.
This info provided by Heather Helton, Sr. Loan Officer, Coady and Lewis Mortgage - 832-276-1679
On days like this, I think it's important to go back to the basics and figure out exactly what all this news means to you, to your mortgage, to your home equity line and to your home's financial future. The 30-year fixed mortgage rate is not tied to short-term treasuries.
Fixed mortgage rates are tied to long-term bond yields that move based on the outlook for the economy and inflation. Today's rate cut does affect short-term adjustable rate mortgages, but not really as much as you might think. Why? Because this rate cut was already priced into the market, maybe not three quarter's point, but definitely a half-point. So if you are facing a reset of your ARM, you're in much better shape today than you were six months ago.
For example, if your rate adjusts February 1st, and your ARM is pegged to the 1-year treasury, then your reset is going to be 5.25 percent as opposed to the 7.5 percent that it would have been in August. That makes the payment much more manageable!
As always, if you or someone you know is looking to buy or sell, please call me! We're more than happy to help.
KATHYE WARFIELD
Kathye@PearlandHomes.com
281-485-1946
