Fed Cuts Rates: Will RV Rates Follow?
The Fed cut rates 1/2 percent this morning in an effort to keep the stock market bubble growing. I'm negotiating a new RV loan to close in 10 days and the dealer quoted me 5.49% last week. I haven't...
Forum Discussion
babock wrote:
Mortgage rates will fall but not as much as you think they might with a 0.5% rate cut. Problem is there is only so much money that can get lent for mortgages and there are only so many banks and lending institutions that can process all the refinances. That causes so much demand that the lending institutions can keep the rates still fairly high yet process as many loans as they possibly can. You may have to wait 3 months to get a loan through because of the high demand.
Basically, they will lower the lending rate to fill their loan pipeline. Once they supply all that and the Fed hasn't raised rates back up, then you might see an even lower home mortgage rate.
That sounds like a correct answer to me. When they raise rates a 1/2 percent it seems like CD rates don't quite go up a 1/2 percent. The banks siphon off more profit for themselves.
Oh well. I'm only borrowing about $25,000 so a 1/2 percent difference is only about $10 per month. That's not going to make or break my budget, but if I could save $120 per year I would like to do it.
