I have read the mortgage rate has dropped down to 4.75%. Does that also mean I can refinance my existing mortgage to as low as 4.75%?
2007-09-30 17:36:15 · 6 answers · asked by chris 1 in Business & Finance ➔ Renting & Real Estate
This would be the Federal Discount Rate.
Has nothing to do with mortgages. The Feds dont control mortgage rates, they are sold on the open market. When the Fed lowered their discount rate... Guess what? They lowered it 1/2 % and mortgage rates went up. Happens every single time.
To answer your question... no mortgages are not 4.75, that is the federal discount rate. What the Fed does with banking doesnt always affect the mortgage rate.
Feds lowered the discount rate by 1/2 percent. Mortgage bonds got worse. Bank rates and mortgage rates arent the same thing. Be very careful if somebody says they have the rate you quoted..... This is what they are doing... Lying.
2007-09-30 19:36:55 · answer #1 · answered by financing_loans 6 · 0⤊ 0⤋
The mortgage rate has not dropped to 4.75%, what has dropped to 4.75% is the Federal Funds Rate which is the rate at which banks lend money to each other. This is a rate for a very short term loan which when it changes will have an effect on longer term loans (such as 30 yr bonds) but it will not be a one for one relationship. So a 1/2 point drop in the Fed Funds rate will not mean a 1/2 point drop in mortgages across the board.
2007-09-30 18:47:57 · answer #2 · answered by iggy_68 2 · 1⤊ 0⤋
Yeah. Only if you have good credit and it is just a teaser rate to get you locked in. This is usually for an ARM (adjustable rate mortgage). After 3-5 years, the rate of 4.75% will adjust to the current market rate at the time, which in my opinion will most likely be around 7-9% then. So it will get higher.
Here is a link to a site for you to help research and compare interest rates with lenders from around the US:
http://www.bankrate.com/brm/rate/mtg_home.asp
The site is legit and fair. No bias.
2007-09-30 17:54:30 · answer #3 · answered by Jackson D 3 · 0⤊ 0⤋
I haven't seen rates like that in a long time. If those rates are available, they'll be for very specific loans. You'll probably have to have some pretty nice credit, loan-to-value ratio under 80% and a dollar amount over $150,000. Then maybe you'll get that rate.
Be sure to read all the disclosures you get when you apply for a loan. Everything will be spelled out for you, but you have to actually look at it. We send out disclosures with about 100 pages. There's a lot of duplication, but it's all required by law.
2007-09-30 17:56:10 · answer #4 · answered by Debdeb 7 · 0⤊ 0⤋
That rate will not be a fixed rate. Prepare for a hit in a year.
2007-09-30 17:41:45 · answer #5 · answered by Anonymous · 1⤊ 0⤋
Only if you have excellent credit.
2007-09-30 17:39:05 · answer #6 · answered by Anonymous · 0⤊ 0⤋