How Will The Recent Fed Rate Drop Affect The Market

Dated: 03/15/2020

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Please understand that the Fed and mortgage rates are two different rates. With the recent Fed rate drop banks can now borrow from the Federal Reserve and the payback is 0% interest. It generally has more affect on bonds, auto loans and bank cards than it does on mortgages. If you are thinking about taking out a mortgage or refinancing your existing mortgage the rate cut could help but we will not know the affect on the markets until Monday. Please seek the advice of a lender for accurate information.


See below statement from lender Chris Kelso with The Kelso Group powered by APM:

"Ok. Here it is. The Fed Rate drop effects the intra-banking lending rates. How this will affect the market we will not know until tomorrow and possibly later as sometimes it takes a while for the market to adapt.

Definition below .....
In the United States, the federal funds rate is the interest rate at which depository institutions lend reserve balances to other depository institutions overnight on an uncollateralized basis. Reserve balances are amounts held at the Federal Reserve to maintain depository institutions' reserve requirements
The more important news was the liquidity they announced to the MBS and Treasury markets that will assist lending liquidity. 
See Below ...
The Fed also resumed the crisis-era policy of large-scale asset purchases by committing to Treasury purchases of at least $500 billion and agency mortgage-backed securities of at least $200 billion “over coming months.”
Rates will continue to fluctuate both down and up over the next few months and the rest of this year however the fundamentals and reasons around buying a home still remain the same and, as I’ve said before, there’s never been better time to purchase real estate then right now!
My suggestions are the following… 
1. Have your application submitted with a lender so that they can take advantage of locking you in when rates drop if you’re refinancing. 
2. If you are purchasing a home… Don’t play with the market. Submit your application with a local lender and lock in when the rate and payments are what you want. 
3. Continue to pay all your bills as it’s always important to maintain a good credit history and that will not change with lower interest rates.
4. Don’t believe everything you hear or read online. Use local resources for your real estate needs, mortgage needs, title needs, inspection needs etc.
5. Stay informed!  Communicate!"


For any questions regarding real estate or for referrals to some top lenders give me a call. I'm happy to help and look forward to speaking with you!


Melissa Banki REALTOR GRI, CNE

Best Priced Properties Team

Helping our clients achieve all of their real estate goals!

www.bestpricedproperties.com


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Melissa Banki | REALTOR® GRI CNE

REALTOR®, GRI, CNE - Hite Properties Best Priced Properties Team - The Woodlands TX Cell: 936-445-0216 Clients First! Treating the relationship with far more value than the transaction. We be....

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