Ed's Blog

Finally! The Federal Reserve did what it needed to do and cut its Fed Funds Rate. As the CNN Headline put it:

'Hallelujah' the Fed swoops in

Although it remains to be seen how today’s action plays out long term, the markets loved it. Stocks had their biggest gains in 5 years, while the bond market didn’t have a cow over inflation fears and held relatively steady.

Let’s hope these trends continue. And let’s hope that this, along with some current legislation making its way thru Congress, will help revive the housing market.

So what does this mean for you as borrowers?

1. For those of you with a Home Equity Line of Credit (HELOC) or credit cards tied to the Prime Rate, the Fed’s cut just helped you lower your monthly bills! Thanks Big Ben!

2. Fixed rate mortgages are once again near historic lows. If you’re looking to refinance at a low rate or buy a home, this could be a great opportunity to do so, especially if your loan falls into the conforming loan category ($417,000 or less for a single family home).

3. If you have an Adjustable Rate Mortgage, you might want to consider refinancing into a fixed rate. But in the meantime, this rate cut will most likely improve your situation by lowering your rate and payments. (There are a few exceptions, such as those with loans tied to LIBOR.)

If you want to check out your personal situation, give us a call or send an email. We’ll be glad to review your personal circumstances and make some recommendations.