Comments on: Fed Cuts Rate And Mortgage Interest Rates Rise

By: Arizona Mortgage Guru » Rate Cut: Federal Reserve Slashes Rates by 0.50%

Arizona Mortgage Guru » Rate Cut: Federal Reserve Slashes Rates by 0.50% — Wed, 30 Jan 2008 22:38:28 +0000

[...] believe me? Well, last week when the Fed lowered rates by 0.750%, I documented (on this blog) the rise in mortgage rates the following Thursday. Also, Jay Thompson, at Phoenix [...]

By: Arizona Mortgage Guru » Volatile Week Ahead for Mortgage Rates

Arizona Mortgage Guru » Volatile Week Ahead for Mortgage Rates — Mon, 28 Jan 2008 17:22:46 +0000

[...] you think last week was a turbulent and volatile week for mortgage rates then brace yourself for the coming week. There are many important reports coming [...]

By: Marshall Spencer

Marshall Spencer — Fri, 25 Jan 2008 19:14:27 +0000

Hello from north of the border and thank you for your insightful blog. As a fellow mortgage professional located in Ontario, Canada I wrote twice this week in my own blog ( http://www.yourmortgagematters.blogspot.com ) about the news that the Bank of Canada also dropped it’s overnight rate and the affect that this had on institutional rates in Canada.
Unlike your lending rate increases on news of Fed rate drops, ours declined in some cases - as it should have reacted - with other lenders chosing to leave rates alone and reap additional profits through increased spreads. Due to the fallout over investments in the US subprime market by so many of the Canadian Banks, their stock prices have been dealt serious blows and of course by increasing income by fattening spreads they are taking advantage of the borrowing public instead of looking at their policies and taking responsibility for poor decisions.
Thanks again for publishing such useful and interesting information !

By: Chris Butterworth

Chris Butterworth — Thu, 24 Jan 2008 22:08:16 +0000

I tell all my clients that nobody knows what rates are going to do tomorrow. One expert says they go up, another expert says they go down. So if you want to gamble on rates going down, you have a 50-50 chance of winning. HOWEVER…

When rates go down, they do down very slowly - banks are cautious about lowering rates, and they probably take some extra profits on the way down. But when rates go up, they go up very quickly, as banks don’t want to get left holding the bag. So overall, you might win, but you stand to lose more than you stand to win.

If you’re happy with your home, and you’re comfortable with the payment at today’s rates, LOCK YOUR LOAN! If you want to gamble, and you can still afford the home if rates go up, then go ahead and gamble.. Good luck to you.

This is a great real-time example of how fast things can change. I’m going to star this post in google reader so I can find it again for future clients to read.

Thanks Shailesh!

By: Jay Griffin

Jay Griffin — Thu, 24 Jan 2008 02:29:28 +0000

I had learned from reading other money and personal finance blogs about this very point you made. The Fed’s rate doesn’t directly affect the interest rates that us consumers care about the most–namely mortgages, credit cards, and higher rate online savings accounts.

I spent the day reading your blog archives and was starting to wonder if you would post about the Fed point decrease.