So, this is a quick one. Recently, the Federal Reserve lowered the Fed Funds rate from 2.25% down to 2%. So, in this episode, we’ll get into what this means for home mortgages.
Now, the Fed Funds Rate does not correlate a hundred percent to mortgages. It affects consumer debt, credit card debt, ARMs, reverse mortgages, small business loans, and anything else that is tied to the prime rate. So, the Fed Funds Rate affects interest rates, but not necessarily in the exact direction that they push those rates. In fact, the moment the Fed lowered the rate, there were a lot of different things going on which means that the rates themselves started going up a little bit.
We suggest checking out this article, High Mortgage Rates Despite the Feds Rate Dropping. It talks about the correlation and understanding that mortgage rates aren’t directly connected to the Fed Funds Rate. One of the proofs for it not being connected is that the Feds only meet eight times a year, yet mortgage rates will change each and every business day. Bond rates are what underlie mortgage rates and those change almost constantly. So, there are many things at play and there’s no way that the Fed Funds Rate directly ties to the mortgage rate.
Either way, it’s always worth keeping up to date and checking in with us, since just because they cut it a quarter doesn’t mean interest rates will go down.
If you have any questions about this or if you have any questions you’d like us to answer on our podcast, you can email your questions to email@example.com or give us a call at (602) 535-2171. Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.
Thanks for listening and reading the Mortgage Brothers Show. Let us know if you have any questions you’d like us to answer on this podcast. You can email your questions to Tom@AZMortgageBrothers.com or Eddie@AZMortgageBrothers.com.
Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.
Signature Home Loans LLC does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Signature Home Loans NMLS 1007154, NMLS #210917 and 1618695. Equal housing lender.BACK TO LIST