Is Now the Time for a New Mortgage?
Apr 3rd, 2008 @ 10:40 AM by MortgageMentor
If you read our blog often, it is no surprise to you that the Federal Reserve has cut interest rates several times over the past months. Many consumers tell me that they hear and see advertisements everywhere that try to entice consumers into getting a mortgage now. Using the fact that the interest rates were cut, their claim is that “rates will never be lower.”
In fact, the Fed does not control long-term fixed rates for mortgages. These are not the same as the federal funds rates that were cut; instead, fixed interest rates for mortgages are connected to mortgage backed securities, and the prices that investors might be willing to pay for them. These can have some impact on adjustable rates, but probably not as much as the advertising lenders would like you to believe.
As always, the best thing you can do if you’re considering borrowing money is to research the mortgage rates. Do not feel pressured because of claims that rates will never be lower (rates always cycle up and down). A good lender will help you find a loan package that is right for you, as well as show you a good-faith estimate to help you find the lowest total cost for your mortgage.
- Posted in Mortgage Refinancing, Mortgages
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As you mentioned a fed rate cut does not mean that mortgage rates will drop. Its always best to take a look at all options that are available and shop 3 or 4 different mortgage lenders to see what options are available.
Hi,
Your blog is really excellent. A mortgage is a sum of money borrowed from a bank, building society or other lenders in order to buy a property. The mortgage is then repaid over time, together with added interest. There are many different types of home loans – including fixed, discounted and even offset mortgages – which is why an apparently cheap mortgage deal may not always be best for your needs.