Fed cuts rates but hints to this one being the last one at least through 2019

As anticipated by the the mortgage markets and everyone else, the Fed cut its benchmark interest rate by one-quarter of a point. In doing so, they
also removed a a key clause used in prior post meetings stating they would, “act as appropriate to sustain the expansion.”  What I read into this
is they are hinting that this may likely be the last cut for some time.


What effect does the Feds rate cuts have on your mortgage?

For fixed-rate mortgages, a rate cut will have no impact on the amount of the monthly payment. Low rates can be good for potential homeowners, but fixed-rate mortgages do not move directly with the Fed’s rate changes. A Fed rate cut changes the short-term lending rate, but most fixed-rate mortgages are based on long-term rates, which do not fluctuate as much as short-term rates.


Credit Card rates effected

Many credit cards have adjustable rates that are tied to the prime lending rate.    Those that are will typically experience a lower rate by the Fed’s action to
lower the Federal Funds rate.


Savings Accounts

When the Feds lower the Federal Funds rate, consumers usually earn less on their savings interest as well.


CD’s and Money Market Accounts

CDs  are safe when the Feds cut rates because they are locked in for a period of time.  For CD’s opened after the Fed’s action, rates will be lower. Money Market accounts however, are generally not locked and can fluctuate.


Get your finances in order

It is advisable to always pay attention to your Assets and well as your liabilities.  And when the FEDs make a decision to increase or decrease the key rates,
it is even more important to check your:

  • Savings Rates – For accounts that are locked, you are probably fine for now. For all others, call your financial adviser, stock broker or money manager to help decide if you need to make any changes.
  • Mortgage – Do You have to the lowest rate available?  Do you have an adjustable rate mortgage? – perhaps now is the time to fix that rate.
  • Timing on Buying a Home.  A low mortgage interest rate translates to a lower monthly mortgage payment


Working with a good Realtor

While home searches can be done on many websites like Zillow, finding a good Realtor is not as easy.  There are a number of exceptional Realtors in Orange
County.  Do some research on their reviews and interview them before hiring one.

In addition to that, homes can often look much different in person than they are presented on the website. As far as repairs and reconditioning, the least possible work that is necessary is what will be  performed. And then consider the fact that many times the agent to contact for the listing isn’t clearly identified, and people oftentimes end up with someone unfamiliar with the property.