So what does this mean when the FED cuts federal funds to 0%? First, it’s important to know that 0% does not mean mortgage rates are 0%. A key takeaway is that the Fed’s will continue to make huge bond purchases to replenish liquidity which should help drop mortgage rates.
While there are a lot of unknowns about what mortgage rates will do during this crisis, we’ve talked to several reputable lenders and most have suggested the same thing.
Don’t try to time rates. Too many applications and not enough liquidity may not reduce rates. The best advice we’ve seen is to get your paperwork together in case rates do go down. Gather all of your documents and be ready to get in line when rates do get lower so you can lock them in quickly.
If you need a resource for a lender to determine if you’re in a good position to save money, contact us!