The Fed cut interest rates to zero. What does that mean to me?

Mortgage rates are NOT zero. Interbanking offering rates are near zero. Today the fed cut interest rates to zero. What does that mean to you? The fed funds are not the same things as mortgage rates, the two are somewhat associated with one another but are not directly tied to one another.

Mortgage rates are based upon the bond market which is not performing normally right now. Becomes of the extreme turmoil created by the virus and the price war between Saudi Arabia and Russia, the market is extremely unstable.

Normally when the fed cuts rates or the stock market drops significantly, people normally move towards secure returns which generally indicates mortgage bonds. Unfortunately at the moment, it appears most people are cashing out of the market altogether. Because they are cashing out of the market this leaves very little demand for mortgage bonds which means the interest rates are actually not moving or increasing. This article on Reuters explains in more detail,   GLOBAL MARKETS-Zero rates, zero impact: Fed & co fail to calm markets  

The good news is the fed did announce some quantitative easing which means that the fed will be purchasing mortgage bonds which should result in lower interest mortgage rates within the next couple of weeks.

If you are interested in purchasing a home or refinancing, (use our refinance Advisor here) the first step is to get pre-qualified. We can get you pre-qualified and ready to move at a minutes notice when the market improves. give me a call today at (214) 945-1066 or complete an online application here …. mortgageprosus.com/apply-now/

Richard Woodward,

NMLS 217454 Your Local, Direct, 5 Star Rated Mortgage Lender, Specialty Lending Manager Office: (214) 945-1066 mortgageprosus.com/5-star-reviews

Service First Mortgage NMLS 166487 6800 Weiskopf Ave #200, McKinney, TX 75070

Licensed by the Texas Department of Savings and Mortgage Lending (SML) Mortgage Banker Registration. Service First Mortgage is an Equal Housing Lender. This is not an offer of credit or commitment to lend. Loans are subject to buyer and property qualification. Rates and fees are subject to change without notice. The views expressed on this site are those of the individual author and do not necessarily reflect the positions, strategies or opinions of Service First Mortgage or its affiliates.