My loan officer said the rate cut would not affect my 30 year fixed rate loan. Am I being lied to?
- Asked By: MoneyTactics
- Category: 30 Year Fixed
We live in Jacksonville, FL and are building a new house. Our loan officer said “That is for the short term rate not the 30 year but it should help down the road.” regarding the rate cut by the Fed today. I feel like this is not right and this should lower my rate. Can someone tell me if I am being “taken” here?
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robert w
Posted 3 months ago
the change in prime has no lowering affect of ur ‘fixed’ rate . be thank full u have a fixed rate many don’t.
Right has nothing to do with business nor does fair. u entered into an agreement.
no u aren’t being taken.
Paul in San Diego
Posted 3 months ago
The rate reduction that the Fed announced is on overnight loans that banks make to companies to help them conduct their business. That’s why the stock market looks so favorably on these rate reductions. Businesses can get a lump of cash on a short-term loan for cheaper, which means they make more money on whatever transaction they’re doing. So, more transactions will occur, more companies make money, and their stock values increase.
hottotrot1_usa
Posted 3 months ago
If you haven’t committed to this loan, you can still shop around.
jbarelli
Posted 3 months ago
No, he’s being straight with you.
The advantage to a fixed rate loan is that when interest rates rise, yours doesn’t. You’re tied into a pre-negotiated rate, and even if inflation gets to the point where the bank is losing money on your loan, it’s not your problem because your rate is fixed.
There is a down side, in that if interest rates drop, yours doesn’t, unless you refinance.
One small thing, since you mention that you are currently building. If you haven’t actually closed the loan, you may be able to “float” your rate, giving up your rate lock.
But beware… Home loan interest rates do not always follow the Fed rate, and I have seen instances where the Fed rate drops, and 30 year fixed rates rise anyway.
Of course, in recent years it’s been more common that the Fed rate rises, and 30 year fixed rates just stay the same (or even drop a bit).
Bottom line. The Fed rate is a short-term rate given to certain specific borrowers. While other rates are sometimes tied to it, often they are not.
If you still aren’t feeling comfortable with the answers your lender is giving you (for whatever reason), then I would suggest talking to at least one or two additional lenders. If you aren’t already using them, I suggest starting with the bank where you keep most of your accounts.
Talk to the local folks. They can almost always at least match what the big internet lenders can do, and when they do something stupid, you have a live person that you can talk to face-to-face.
alterfemego
Posted 3 months ago
If you have already lock into your rate, no it will not affect you. If you haven’t lock in your rate it could potentially afford you a little lower rate. Depends on what the lenders are willing to give.
Carolinahomerates.com
Posted 3 months ago
that was applied to DISCOUNT RATES….but the FED lowered the FED FUNDS RATE.
Par rate is at 5.875 with about 1origination fee on a 30yr fixed. this also depends on the score….down payment…etc.
Other Questions
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- If mortgage tax & interest forms are only in my name but multiple owners can they file my forms under thir nam?
We live in Jacksonville, FL and are building a new house. Our loan officer said “That is for the short term rate not the 30 year but it should help down the road.” regarding the rate cut by the Fed today. I feel like this is not right and this should lower my rate. Can someone tell me if I am being “taken” here?
Incoming search terms:
- Can I itemize my mortgage interest paid in my taxes?
- Do mortgage lenders pull credit reports multiple times during the refinance process?
- how do they calculate the mortgage payment with interest?
- How long after a foreclosure is there an auction?
- If mortgage tax & interest forms are only in my name but multiple owners can they file my forms under thir nam?
robert w
Posted 3 months ago
the change in prime has no lowering affect of ur ‘fixed’ rate . be thank full u have a fixed rate many don’t.
Right has nothing to do with business nor does fair. u entered into an agreement.
no u aren’t being taken.
Paul in San Diego
Posted 3 months ago
The rate reduction that the Fed announced is on overnight loans that banks make to companies to help them conduct their business. That’s why the stock market looks so favorably on these rate reductions. Businesses can get a lump of cash on a short-term loan for cheaper, which means they make more money on whatever transaction they’re doing. So, more transactions will occur, more companies make money, and their stock values increase.
hottotrot1_usa
Posted 3 months ago
If you haven’t committed to this loan, you can still shop around.
jbarelli
Posted 3 months ago
No, he’s being straight with you.
The advantage to a fixed rate loan is that when interest rates rise, yours doesn’t. You’re tied into a pre-negotiated rate, and even if inflation gets to the point where the bank is losing money on your loan, it’s not your problem because your rate is fixed.
There is a down side, in that if interest rates drop, yours doesn’t, unless you refinance.
One small thing, since you mention that you are currently building. If you haven’t actually closed the loan, you may be able to “float” your rate, giving up your rate lock.
But beware… Home loan interest rates do not always follow the Fed rate, and I have seen instances where the Fed rate drops, and 30 year fixed rates rise anyway.
Of course, in recent years it’s been more common that the Fed rate rises, and 30 year fixed rates just stay the same (or even drop a bit).
Bottom line. The Fed rate is a short-term rate given to certain specific borrowers. While other rates are sometimes tied to it, often they are not.
If you still aren’t feeling comfortable with the answers your lender is giving you (for whatever reason), then I would suggest talking to at least one or two additional lenders. If you aren’t already using them, I suggest starting with the bank where you keep most of your accounts.
Talk to the local folks. They can almost always at least match what the big internet lenders can do, and when they do something stupid, you have a live person that you can talk to face-to-face.
alterfemego
Posted 3 months ago
If you have already lock into your rate, no it will not affect you. If you haven’t lock in your rate it could potentially afford you a little lower rate. Depends on what the lenders are willing to give.
Carolinahomerates.com
Posted 3 months ago
that was applied to DISCOUNT RATES….but the FED lowered the FED FUNDS RATE.
Par rate is at 5.875 with about 1origination fee on a 30yr fixed. this also depends on the score….down payment…etc.
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Sahara
Posted 3 months ago
He is correct. The rate that was cut is not the rate that affects mortgage rates. But the rate cut will trickle down. In time, you should see rates go lower. It’s just not an automatic thing. Has the Prime rate been lowered? Check 10 year treasury rates. That is the rate that is tied to mortgages.