October 8th, 2008

Reader: I’d Be More Likely to Buy A Home If Fed Cuts Rates



A reader contacted HSH a couple of days ago about the possibility of the Fed cutting rates soon, and if they happen to do so, he would be more apt to buying a home than if they didn’t.

As most of you know, the Fed cut the Federal Funds rate this morning by .50% to 1.50%. Unfortunately the Fed Funds rate has no direct control over the direction of mortgage rates.

To find out what affects the movement of mortgage rates, read this article by HSH, “What Moves Mortgage Rates.”

Borrowers should focus on making certain they can get access to today’s mortgage money — making sure their credit is solid, have a sufficient down payment, can accurately document their income and assets, and that their debts are manageable relative to their income.

If you can get financing, have a steady employment situation, and found a home you love, go for it. If rates do happen to fall during the process, even better. Borrowers should ask their lenders about “Float-Down Options,” where you can get a better rate should they decline, and see if you can have the best of both worlds.

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

Our bloggers:

Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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