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Originally Posted by Mr Bogus @ Mar. 19 2008, 6:25 PM so how much will a .75 cut make in FHA rates? Â* I have been trying to be patient before I refi (no cash back) but I am getting antsy... |
Actually it will not help. The rates have come down a .25 Normally when the fed does this it will stimulate the economy which can actually effect mortgages negatively. The rates will start rising soon but you may see a small drop in the next week before they start going up again. This happens because Fed rate cuts help to stimulate the economy, by making it less expensive to finance personal and business purchases...and this in turn fuels inflation, the arch-enemy of fixed return assets like Bonds, which home loan rates are based on. Everytime this is done by the Fed, our dollar drops in value and now we have had an increase of 18% in fuel costs. The rates went up from the SHOCK of what the fed did, The rate will drop a little, then jump up. This is the 6th time they have done this since September. We will probably see an increase of around 1% by summer on home mortgage rates. But your credit card rates may drop a little so you can spend more $$. The less our dollar is worth, the more oil will cost which means look forward to more increases in Fuel costs too.