FED RATE CUT…What does it mean?

8/1/19- Mike News UpdateI hope your week is going well and YES the Federal Reserve cut Interest rates yesterday and it really didn’t do anything to interest rates when it comes to mortgages.  Every time interest rates are cut, inflation becomes a little more of a concern.  I don’t think that is a big concern now, but rates will continue to rise and fall with economic and political news.

Credit cards and debt are the enemy and they are eating away at retirement, savings and so much more.  Here is the best way to get rid of credit card debt.  Pay off the cards with the highest interest rates first!  Once you pay off one card in full then use just that card to charge new stuff every month.  Then pay that bill in full every month.  Make all of the minimum payments on the rest of your cards and then go after a second card until you pay that in full.  You should not charge on any of the other cards and just charge on the card you pay off monthly.  When you pay that card in full monthly then you won’t be charged interest when you buy groceries, gas or anything as long as you continue to pay that one bill in full every month!  If you find that you are short one month then you are going the wrong way and you either need to cut expenses, make more money, or charge those other cards and that would mean you are going backwards.  Yikes!  Not a good place to be.

What does this have to do with a mortgage?  A mortgage rate is in the 3’s and credit Card interest is in the 18%-35% range.  A house usually appreciates over time.  The new dresser for your apartment is worthless after you spend $800.00 on it.  The new wheels on your car for $1500.00 are worthless when you trade in the car.  The Lulu’s, the Louis, the Nike’s, the Louboutin’s, the Mercedes, BMW, Lexus all depreciate and cause more debt.  So when people talk about life balance does that mean as long as they have a high enough balance in their bank to cover the minimum payments then they have balance?  OK, off my high horse, but we have to get rid of the debt, and buy houses if we are going to have money for kids, college, and retirement.

Interest rates are looking a tad better today, but not at 2014 levels yet. Below are rates as of today:

  • 30-year fixed conventional 1st Mortgage with 25% down – 3.750% (3.815 APR). Loan amounts up to $484,350.00 = $2243.10
  • 15-year fixed conventional 1st Mortgage with 25% – 3.250% (3.350 APR). Loan amounts up to $484,350.00 = $3403.38
  • 5/1 ARM 1st Mortgage –  25% down – Fixed for 5 years and then becomes variable – 3.250% – (3.2605 APR) Loan amounts up to $3,000,000.00 = $13,056.19
  • 7/1 ARM 1st Mortgage – 25% Fixed for 7 years and then becomes variable – 3.375% – (3.385 APR) Loan amounts up to $3,000,000.00 = $13,262.89
  • 10/1 ARM 1st Mortgage – 25% Fixed for 10 years and then becomes variable – 3.500% – (3.510 APR) Loan amounts up to $3,000.,000.00 = $13,471.34
  • 30-year fixed 1st Mortgage FHA loan 3.50% down – 3.375% (4.788 APR). Loan amounts up to $484,350.00 = $2178.77 + $349.08 PMI = $2527.85
  • 30-year fixed 1st Mortgage VA loan 0% – 3.375% (3.556 APR). Loan amounts up to $484,350.00 = $2141.29
  • 30 Year Fixed rate 1st Mortgage Jumbo Loan 25% down – 4.125% (4.145 APR).  loan amounts up to $3,000,000.00 =14,539.49

I will be in the office the rest of the week and I will be in and out all weekend!  My cell number is 661-714-6258 and my office number is 661-260-2970.  Have a great weekend and I hope to hear from you!