REFINANCE QUESTIONS
TERM GLOSSARY 
 

DEFINITIVE CALCULATORS

REFINANCE CALCULATOR
MORTGAGE PAYOFF

REFINANCE LOAN CENTER

Need To Free Up More Funds?
Mortgage Payments Too Large?
Need Cash Right Now?
Want To Pay Off Your Bills?
LendingTree Mortgage Refinance Loan

Fed Rate Cut News Alert

January 22 2008
Feds cut rates 75 bps. The biggest cut in  17 years. Homeowners seeking release from ARM's may see this as a good time to refinance. 

The New York Times reports, "The reduction in the federal funds rate from 4.25 percent down to 3.5 percent marked the biggest reduction in this target rate for overnight loans on records going back to 1990."

The rate cut news is said to impact 15 year mortgages for the better. Homeowners should have no trouble finding lower mortgage rate deals online. 

See A History of Fed Rate Cuts
January 30, 2008
The Federal Reserve voted unanimously to keep the key interest rate untouched at 41-year lows Wednesday, with the intent of impacting consumer confidence and spur more spending and investment and pick up a slowing economy. 

The Fed said that rising oil prices and geopolitical tensions may put a strain on spending and hiring by businesses. However, "as those risks lift, as most analysts expect, the accommodative stance of monetary policy, coupled with ongoing growth in productivity, will provide support to an improving economic climate over time," the Fed said in a statement following its first meeting of this year. The decision to hold rates steady leaves the prime lending rate at 4.25 percent, the lowest level since May 1959. 

A History of rate cuts.
The fed rate cut in November 2002 pushed the funds rate and the prime rate down to their currently low levels, slashing the funds rate by a half percentage point. In 2001 consumers enjoyed 11 rate cuts as the Fed sought to rescue the economy from an impending double dip recession. The fact that rates were not cut may indicate some confidence in the direction the economy is heading.

January 28, 2003
Equity markets trade in the green while investors await news regarding Fed rates this week. Will the Fed cut rates during its Open Market Committee meeting? Only time will tell. Some factors involved will be how volatile market conditions really are. Recent Labor Debt. statistics, housing, income and consumer confidence. Obviously Mid-East tensions and it's economic impact weigh in to some extent. How do rate cuts impact your money? ...read more.

November 2002
As the world watched the Fed cut rates one half point at the November 2002 Federal Open Market Committee meeting. "In these circumstances, the Committee believes that today's additional monetary easing should prove helpful as the economy works its way through this current soft spot," the Federal Open Market Committee announced.

The FOMC holds eight regularly scheduled meetings per year to direct the conduct of open market operations by the Federal Reserve Bank of New York in a manner designed to foster the long-run objectives of price stability and sustainable economic growth. The FOMC also establishes policy relating to System operations in the foreign exchange markets. 

This move indicates that the economy is slowing too quickly. Good news for the bond market, but with a stock market rally draining funds from bonds mortgage rates are likely to go higher in the short term.  The overnight rate influences the prime rate. Consumer debt tied into the prime rate are variable-rate credit cards, car loans and home equity lines of credit. How will the rate cuts impact your money?  How can you take advantage of lower rates?

A rate cut is designed to stimulate the economy by making it cheaper to borrow money.  The Feds half point reduction in key short-term rates will probably immediately fuel a stock market rally which may very well hurt bond prices and push mortgage rates higher. 

The Fed's actions will likely spur consumer confidence and encourage spending, financing debt management programs as well as major product financing such as car loans and home loans. Still it takes 12 to 18 months before a rate cut impacts the economy for the better.  

In time the prime rate will drop to 4.25 percent. When this happens look for rates on some home equity loans and home equity lines of credit to drop. Rates on some variable-rate credit cards could drop as well. 

If you have an adjustable rate loan or credit card anticipate a drop in rates in the weeks following a rate cut. Fixed rates are not affected. However if you opt for a 15 or 30 year fixed rate loan program you're still in for savings of up to thousands of dollars over a rate that's just .50% higher. Considering that today's rates are at  historic lows, a less risky approach to getting a good deal on a rate is to apply for rate quotes at lending marketplaces now.  

Have lenders compete for your business and negotiate your best rate with such programs as adjustable rates mortgage to take advantage of future rate cuts..  Protect your current or future desired rate with rate re-lock-ins or long term rate locks that allow for rate locks of 30-60 days or more.
LendingTree Mortgage Refinance Loan

Newsletter | Resources   About Us | Contact Us    PRIVACY

Copyright © 2003, 2004, 2005, 2006, 2007 RefinanceLoanRates Company
926 Cator Ave. Balt, Maryland
Phone: 410 323 4202