Federal Reserve Cuts Interest Rates to Near Zero
CrossCountry Mortgage • March 16, 2020
Does that mean mortgage rates are almost zero as well? Should you lock in a rate today?
HousingWire
reported on Sunday that the Federal Reserve made its second emergency cut in two weeks, slashing 1% off its benchmark rate. The Fed also renewed a program to buy Treasuries and mortgage bonds in an effort to bolster the economy as the coronavirus that causes COVID-19 spreads in the U.S.
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Many consumers assume mortgage rates mirror the Fed rate. In an extensive article
posted soon after Sunday’s cut, Mortgage News Daily’s Chief Operating Officer Matthew Graham explained why this is NOT the case. I encourage you to read the entire article
for the complete details, but here are the primary takeaways:
- The Fed did not just cut mortgage rates.
- Mortgage rates often move in the opposite direction as a Fed rate cut/hike and did exactly that at the end of last week.
- You may be able to get a lower rate at some point in the coming weeks, thanks to the Fed’s reinvigorated mortgage bond buying efforts.
- Make sure your originator has what they need from you in order to lock when and if your desired rate becomes available.
Speaking to that last point, the best approach for now is to make a game plan. Let's connect today so you’re ready to seize the moment and get the lowest rate possible on a new home purchase or refinance. Just know that rate is NOT near zero right now, even though the Fed’s rate is.
‘Tis the season for cold weather maintenance.
Communication is one of the most important aspects of the home loan experience. Learn why regular contact with your loan officer is imperative to homebuying success.
Maybe it started as a little daydream after you flipped through the latest issue of your favorite home décor magazine. The thought of those gorgeous green soapstone countertops in your kitchen just wouldn’t go away. Then you found yourself showing the spread to your spouse with a wistful sigh, saying, “Wouldn’t that look amazing?” Before you know it, you’re both talking excitedly about new ideas for a dream kitchen. This is the moment of conception for your home renovation, and it’s full of possibility and promise. But this conversation of the future has to return to the present day before spinning out of reality’s orbit. As with any big life decision, it’s important that you first undergo a thorough reality check to make sure it’s the right big life decision. When it comes to home renovations, the reality check takes the form of a sensible budget.
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