Good question. Generally, experts think The Federal Reserve's first rate cuts in four years are good news for mortgages and the economy, and that makes them good news for you and me, too. The Federal Reserve's decision to cut a key interest rate will bring lower mortgage interest rates in the coming months.
Economists say the rate cuts will help more people qualify for mortgages, and it will help homeowners who want to refinance their mortgages.
Home buyers and mortgage holders were the targeted beneficiaries of the interest rate reduction.
Rate cuts take time to work their way through the economy, but consumers may immediately see some benefits in reduced interest on credit cards and home equity loans. Upon hearing the news, big lenders such as Wachovia, Wells Fargo, and
KeyCorp immediately cut their prime rate for their best customers.
About half of all adjustable rate mortgages are tied to the short-term Treasuries on which interest rates were reduced. That means that adjustable rate mortgage payments will not rise as much when the next adjustment is made.
Maybe we won't see quite as many foreclosures as were expected, when May of '08 rolls around.
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