The Fed Rate Cut and Its Relation to Your Mortgage
Quicken Loans offers up a short and somewhat useful article detailing how the recent Federal Reserve’s Rate Cut might impact your mortgage.
Now, I personally do not trust Quicken Loans as they once promised me a rate on my own home refinance. I locked in at the rate and 2 weeks before the close they called to tell me that it was no longer possible unless I paid a higher interest rate. They offered up excuses that were unprovable, but the reality was that it was either their way or the highway.
I chose the highway and refinanced with Wells Fargo instead!
Regardless, their short article Does the Fed rate cut affect your mortgage rate? offers up the examples necessary to understand how the Federal Reserve Rate Cut a can impact your finances ( a little ) both positively and negatively. The article is not likely to save you a fortune this year or even save your house from foreclosure if you are in trouble, but understand the situation might save you enough money to buy a truck rack on clearance from an after christmas sale.
The key concept to understand is that the Federal Reserve has the ability to impact short term interest rates. Here are some loans that may be impacted in the short term:
Credit Cards
Adjustable Rate Mortgages (ARMs) - under 7 years, even more if 3 or under
Home Equity Lines
Some (but not all) Student Loans
Your Savings Account rates
New Vehicle Loans - Ergo new loans that you take out as opposed to the loans that you already have.
Other Lines of Credit - such as Overdraft Protection
