A Lower FED Rate DOES NOT Equal Lower Rates

[@TheEducatedHomebuyer]

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[@MaddieBr]

You are two of the very few RE podcasters who actually understand how interest rates work!

[@micker9830]

Keep rates high!! Enjoying my CD interest rates right now lol.

[@TheEducatedHomebuyer]

The upside to higher rates is better returns for savers. Unfortunately those yields are going to moderate as rates come down. If you don't need liquidity, lock in the yields with longer term CD's while you can.

[@JoeZamoiski]

If you need a good advisor on the east coast (not new york), happy to help. Great video! Been doing this 25 years. cheers fellas!

[@TheEducatedHomebuyer]

Thanks for the listen.

[@dixielandproductionco.6989]

Thanks for the notification smashed the thumbs up good stuff guys

[@sage1jenn379]

Basically, companies do what they want and use very flexible guidelines 😂

[@carlosmeneses7098]

Hope you can answer my question Bought a house last year at the end of August bought 3 points to get my rate at 6.35%. How low interest rates need to be to make sense to refinance

[@TheEducatedHomebuyer]

Just consider the 3 points a sunk cost Carlos. They are irrelevant to when and whether it makes sense to refinance. The decrease in rates needed for a refinance to make sense will vary depending on your loan size. A good rule of thumb for determining if you should look more closely at refinancing is to take $125k and divide it by your loan amount,. If you own $250k, you need rates to be about .500% lower ($125k/$250k). If you owe $500k, you probably only need to save .250% on a low/no-cost refi for it to make sense. Reach out if we can help: [e-mail]

[@deltaXna]

Fed funds doesn't equal mortgage rates decrease but it is loosely tied to it. Mortgage rates WILL be lower. The overnight rate trickles down to lending rates. The mortgage rate is tied more to the 10 yr.

[@TheEducatedHomebuyer]

Partially true. There is a loose relationship but Fed Funds certainly doesn't trickle down to mortgage rates. You can see that by the nearly 1% move lower in longer term treasuries and mortgage rates without a single Fed cut. The markets don't wait for Fed action, they watch the data and react accordingly. Same on the way up. Treasuries and mortgages spiked well before the first Fed hike in 2022, and pretty much every hiking/cutting cycle before then.