For new mortgages, very little. Mortgage interest rates have very little to do with the Fed Funds rate. Fed Fund rates are short term rates between banks. A mortgage is a long term loan and the mortgage company is looking at what it thinks rates will do long term.
How low will the mortgage interest rate go with the feds recent interest rate cut?
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For new mortgages, very little. Mortgage interest rates have very little to do with the Fed Funds rate. Fed Fund rates are short term rates between banks. A mortgage is a long term loan and the mortgage company is looking at what it thinks rates will do long term.
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These rate drops will help Home Equity loans for the short term but won;t do much for 30 Year fixed mortgages. Rates are fairly low right now anyway.
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it really depends on how the markets take this move. Based on today’s stock market activity, they are not taking it very well and stocks are still down. If the stock market and equities both domestically and internationally continue to drop, it will be good news for rates. If stocks recover the losses they’ve taken early this week, then rates will shoot back up. It’s too early to call.
References :
http://www.ratezip.com/mortgage.html