What Does A Fed Rate Cut Mean For Your Mortgage Rate?

What Does A Fed Rate Cut Mean for Mortgages?

We often get the question, when is the best time to lock in my rate? This question tends to heighten in volume when a Fed meeting is around the corner.

In short, do not let the rumor that rates are going down deter you from locking in your rate. Why? The Fed meeting affects a short term rate that affects short term loans between banks, called the Innerbank Offer. Mortgages are on long term bonds that are usually 30 year fixed options, therefore the Fed cutting rates does little to nothing for your mortgage rate. In fact, over this past year mortgage rates have dropped .75% without the Fed doing anything.

So if you’re thinking of locking your rate and your loan officer is suggesting it, do it!