Robin Camacho
Las Vegas Real Estate
David McKee
Stiffs & Georges
Jean Scott
Frugal Vegas
Short Sales - It's The New Black
Dan said: My daughter and son-in-law just went thru a short sale they were trying to buy. The bank was NOT ver... [More]
Has Las Vegas Real Estate Hit Bottom?
Judy Taylor said: Robin, and others, have pointed out how much like a Circus Midway the home market in Las Vegas has b... [More]
Has Las Vegas Real Estate Hit Bottom?
Taryn Hazelwood said: My husband and I are moving from Gig Harbor and have made offers on 8 homes, only to find our offers... [More]
Las Vegas Home Sales Skyrocketing (Again)
Judy Taylor said: Robin, you must be out there turning around the housing overstock here in town. The amount of homes ... [More]
Wake Up, Roger, and Own Your Own Piece of Las Vegas
Judy Taylor said: What does "Active-Exclusive Rights" mean on the MLS? I just started seeing the term since ... [More]
Enter your email address to subscribe to this blog.
Posted At : January 30, 2008 11:23 AM | Posted By : Administrator
Related Categories:
Current
The Federal Reserve is widely expected to drop the fed funds rate another half-percent when the FOMC meets today. Every time the expectation is there for the rate to drop, clients decide to wait, incorrectly assuming that they will get a lower interest rate.
Mortgage rates are based on what is happening with mortgage bonds, not on what is happening with the fed funds rate. Sometimes a drop in mortgage interest rates will follow. Sometimes it may snow in Las Vegas the following day. Neither of these occurrences can be directly attributed to the drop in the fed funds rate.
When the FOMC dropped the rate by .75 percent, nine days ago, mortgage rates happened to fall dramatically soon after the announcement. I begged my client, Ted, to let me instruct his lender to lock his loan, saving him nearly a full point. Ted insisted he wanted to wait until the Fed was scheduled to meet again today, confident he would get an even lower rate. While I explained that the fed funds rate doesn't determine mortgage rates, Ted wouldn't budge. The following day, rates had jumped back up by .5 percent and he lost the opportunity to get an incredible rate.
My client Jenny, on the other hand, took my advice. Jenny locked her rate that day, and once she closes escrow she will save money every month for the life of her mortgage. She and her husband are already picking out the new toys they'll buy with the savings!
The only advice I would give is to watch rates daily if you are planning to use a mortgage to purchase your new home. If you are working with a loan officer already, make sure he or she is actively managing your mortgage, so that you will get a call if rates drop or programs change.
There are no comments for this entry.
[Add Comment]