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Federal Reserve
cuts in the federal funds rate have
an unpredictable impact on long-term
mortgage rates. So it's impossible
to know for sure when -- or even if
-- rates will fall as a result of
the Fed's latest rate cut.
How soon could it affect you? |
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Fixed-rate
mortgages usually do not change
significantly in response to cuts
in the fed funds rate. However, adjustable-rate
mortgages may be more sensitive to
Federal Reserve rate decisions.
Depending on the exact nature of their mortgage, some people with ARMs may see their rate adjust downward the next time the mortgage resets.
Conclusion
It's impossible
to know when -- or even if -- fixed-rate
mortgages will fall given the Fed's
most recent trim to the federal funds
rate. However, it's possible that
some homeowners with adjustable-rate
mortgages will see lower payments
the next time their mortgage rates
reset.
You can use our
handy mortgage
calculator to determine
what your monthly mortgage payment
would be if you bought or refinanced
a home.
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Fed announcement: June 24, 2009
