As expected the FED cut the Federal Funds rate another .75% to 2.25%. Again this is the rate that banks and other institutions borrow money at. (not a rate that directly lowers mortgage rates)The cheaper it is for them, the more liquid they are. It is the FED's hope that this helps during this extremely trying time!
As usual the markets have bounced all over the place as a result of this news. Mortgage rates dropped a ton yesterday and then we have seen numerous re-prices for the worse today! This was expected, but it is extremely frustrating for us and to the public it just flat doesn't make sense! We hope things will settle down just a bit in the coming days, but the answer is we just don't know what will happen!
My advice to anyone getting a rate quote is this. Stay informed and make sure you are dealing with a lender who is experienced. You just can't afford to float your mortgage rate out there with someone who doesn't follow things closely. When you are quoted a rate, take it in stride. If you do not lock the rate at that time, it will change numerous times until you do. Most consumers don't realize this is happening and if the lender does his job, the end rate is what was quoted or better! Only in rare circumstance does the market go sour so fast that locks can't be made, causing your rate to increase form the quoted rate. This does happen from time to time. More often than not it is with a lender that doesn't follow the market and just waits for the rate sheet. However, it can even happen to the best of lenders.
With all this being said, just realize we are working for you. We want you to get the best rate too! This is why we study the market as intensely as we do. When we quote someone, we want it to mean something! We just want to point out that this volatile market "is what it is" and we all must deal with. If you are in the market for a mortgage, please set your expectations appropriately. Realize that the market is extremely volatile and don't get too greedy! We haven't seen more that 4 days of continuous declining rates in quite some time. Especially since the credit crunch hit! You need to have a very clear idea of the rate you want and what you risk tolerance is. Have that max rate in mind so your broker can lock and save you money if the market makes a sudden turn for the worse! If you maintain the correct frame of mind, you will no doubt come away pleased and end up with a quality rate!
Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"
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