In view of a weakening of the economic outlook and increasing downside risks to growth, the Federal Reserve board on December 16^th dropped the target short-term interest rate, to .25%, the lowest level in history. This basically means that banks can borrow money from each other at relatively no cost.  This now pushes the Fed’s monetary policy to the limit. The short term interest rate drop has a direct effect on some credit card rates as well as short term credit programs, like home equity lines of credit. CLICK HERE for the official press release.

While this rate cut didn’t directly have an effect on home mortgage rates, the overall market has anticipated the Fed’s next move of buying mortgage backed securities and/or treasury bonds in an effort to push bond prices up, thus lowering home mortgage rates. 30 year fixed rate mortgage are now around 5% and are predicted to dip lower. Interested in refinancing or getting pre-qualfied, call Randall Fowlkes at 630-399-9291 or email rfowlkes@ksgmac.com.

There has hardly been a better time for current homeowners to refinance their mortgages or for 1^st time buyers to finally buy their dream home. If you or someone you know can benefit from this opportunity, give me a call.

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