New Hampshire and Maine Homes and Condos

As we all know, the Federal Reserve has twice now in the last 10 days or so cut the Fed Funds rate. With all the media coverage of those rate cuts, I've been getting a lot of questions about just what that means to homeowners and those thinking about buying in the near future.



The first thing we all need to understand is that the Federal Reserve just doesn't set mortgage rates. Who or what does? The bond market does. And these rate cuts by the Fed had already been factored into the bond markets.




OK, so what does that really mean? The Federal Funds rate is the rate that banks use to borrow money from each other, and it's also used to derive all other interest rates - mortgages, credit cards, etc. That rate is used by banks to determine the prime rate for lending.

So, even though mortgage rates are not directly tied to these rate cuts, at this point, the Fed Funds rates have been lowered by 1.25 points. Mortgage interest rates tend to follow the prime rate, which is tied to the Fed Funds rate. And this could mean lower interest rates for 30 year mortgages, and definitely lower rates for adjustable rate mortgages (ARM). If you already have an ARM, and are expecting an adjustment shortly, that adjustment should be smaller. To get detailed answers about mortgage rates and to get information about today's real estate market, contact your Portsmouth NH REALTOR.

What about refinancing - is this a good time to think about that? It depends. How's that for an answer? It really does depend on your own situation. If you've got good credit, if you have an ARM, and if you're not planning to move any time soon, this may be a wonderful time for you to refinance. Interest rates are the lowest they've been in quite some time, and there's no guarantee that the rates will go any lower even if there are more Fed rate cuts. In fact, if the Fed achieves its goal of stabilizing the economy, rates may actually go up a little. So don't wait, if you're thinking about refinancing.



What about credit cards and the impact on those rates? Rates tied to the prime are definitely impacted by the Fed Funds rate cuts. Call your credit card companies and request lower interest rates. If you've got good credit, you should be able to get your credit card interest rates lowered by making some simple phone calls. You should also be able to get better interest rates on car loans and on home equity loans as well.


Every little bit saved is a good thing and money in your own pocket!



If you have questions about interest rates, or if you're thinking about investing in Portsmouth New Hampshire real etate, homes or condos, please give me a call! I'd love to be of service and help you achieve your real estate goals.

Are you looking to buy a home in the Portsmouth New Hampshire-Southern Maine areas?  If so, send me an email or give me a call - Id love to help you find just the right home for you!

 
    

             





                                  
  Ann Cummings, Maine and New Hampshire REALTOR
  RE/MAX Coast to Coast
  Portsmouth NH
  ann@anncummings.com
  888-349-5678 x 3839
  Servicing the Coastal Areas of NH & Southern Maine                    



                                    

~~ Photos from flickr ~~

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