Weekly interest rate comment from Mickey Carlton, Mortgage specialist:
Interest rate movement remains fairly quiet this week as the market awaits Wednesday afternoon's announcement from the Federal Reserve regarding their decision on rates. The Fed is widely presumed to be planning a further quarter point reduction in the Fed Funds rate. Again, you should be cautioned that this is an overnight rate used by banks to borrow from one another to meet their reserve requirements. The Fed DOES NOT set mortgage rates. A rate reduction would have an immediate positive effect on consumer rates such as home equity lines, auto loans and credit cards.
The effect, in any, on long-term mortgages should be minimal and might actually cause a slight uptick in rates. Currently, borrowers can obtain 30 year fixed rate financing for rates ranging from 6.125% to 6.75% without paying discount points or origination fees. Actual rate will depend upon loan size and the individual borrower's creditworthiness.
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