Whcih way is your mortgage interest rate heading?
Many people assume that when the Fed cuts interest rates it will lower mortgage interest rates, but this is a misunderstanding. Long term mortgage rates are not tied to short-term treasury notes.
The Federal Reserve cut interest rates by three-quarters of a percentage point Tuesday, but don't expect mortgage rates to go down too. In fact, home loans could be heading higher.
Long-term mortgage rates (30 year) are tied to inflation concerns and not the Fed rate.
But, your Adjustable Rate Mortgage interest rate may lower because there is more of a connection between ARM’s and the Fed rate.
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