How do rate cuts by the Feds affect your ability to buy Virginia Beach real estate?

Yesterday, the Feds slashed the federal funds interest rate (the ratebanks charge each other) by a bold 3/4 of a point, bringing the rate down to 2.25 percent, the lowest since late 2004. At the same time, the discount rate, the interest it charges to make direct loans to banks, was cut 3/4 of a point, pushing this rate down to 2.5 percent. These rate cuts are designed to lower borrowing costs and boost spending by consumers and businesses and thus increase economic activity. Full story.

How do rate cuts by the Feds affect your ability to buy Virginia Beach real estate? Often, rates on home loans drop prior to the announcement of a rate cut, in anticipation of the Feds decision. Then after the cut, rates often even go up a little. I found these rates posted on Union Mortgage Group’s site this morning….

The average interest last week on a 30-year fixed rate mortgage was 6.13%, according to the Freddie Mac survey. At first glance, interest rates to purchase Virginia Beach real estate have dropped considerably.

We are not mortgage lenders and certainly not experts on interest rates, but one thing we can recommend is if you are in the market to buy a home, call your lender and ask questions… Has the rate cut increased my buying power? Is it time to lock in the rate? Don’t have a lender? Contact us and we will refer you to a reputable and competitive lender who will answer your questions with no obligation. You can reach us at 866-222-0158 #550 or Info@ButlerTeamHomes.com or ButlerTeamHomes.com.

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