Mark's Blog Report

This is a big misunderstanding with many consumers and homeowners.   The fed cut rates for a total of 1.25% in 30 days last month.  So why are rates not continuing to go down?  Well, the good news is the Prime rate is going down.  When the fed rate drops , prime drops with it.  The fed rate is currently at 3% and that puts prime at 6%.  You will probably see another 0.25% to a more than likely 0.50% decrease in the fed rate during the March meeting.  When this happens you will see prime drop another 0.25% or 0.50% as well.  So HELOC mortgages in the first or second position that are based on Prime are going down at this time.

The mortgage rates on a first are more impacted by financial news, inflation, recession talk, the stock market, and the bond market.  When financial news comes out that is worse than expected it can have a negative impact on the stock market; therefore people may be putting their money in bonds which are more secure and safer.  When this happens the mortgage rates can drop.  So remember, a down day in the stock market fueled by an increase in bonds means lower mortgage rates.  I always have my TV in my office on Bloomberg which has a great a wealth of information to help you determine what is going on in the market.

During these volitale times it is a good idea to lock your loans early and do not get too greedy.  Always visit my daily rate lock advisory page at www.sfslend.com/dailyratelockadvisory.