Mortgage Rate Cuts
February 2009

First rate cut in four years is good news for mortgages, the economy
The Federal Reserve's decision to cut a key interest rate by .5 percent will bring lower mortgage interest rates in the coming months.

Economists say the rate cut will help more people qualify for mortgages. And it will help homeowners who want to refinance. 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 will immediately see some benefits in reduced interest rates on credit cards and home equity loans. Borrowers who take out new loans, however, will immediately benefit from the lower rates.

U.S. consumers owe about $800 billion in credit card debt. A drop of half a percentage point in interest represents about $4 billion in savings per year, according to CardTrak. That comes to about $30 per month per household.

The rate cut was very good news for the stock market, which rose 335.97 points right after the announcement. It was the market's biggest one-day rally since 2002.

While stock market prices don't directly affect everyone, they are an indication of a stronger economy.That does affect everyone because more jobs are created
and wages may rise.

Call us and make sure you are in the lowest rate possible

Related Links:
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