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Charles Said:

How will the recent cut by the Fed of the discount rate affect the intrest rates on home mortgages?

We Answered:

In 1983 I bought a home with a 13% interest rate. They had just gone down from 18% so they were great!

Today interest rates on homes are terrific. The Fed rate cuts only effect short term rates. Mortgage rates are more dependate on what the investors believe inflation rates will be over the next 10 years or so (statisticaly the life of most mortgage loans). Anything that makes them believe the inflation rate will be higher or lower will change your interest rate.

Judy Said:

Did Bush lower INTEREST rates on home mortgages during his presidency?

We Answered:

My previous masterpiece of an answer still applies. Darnit! It's gone. It's not often that I come up with something so brilliant that demonstrates scholarship and mastery of the most complex of economic theories... or something.

Vincent Said:

Why are the interest rates on home mortgages higher for African Americans?

We Answered:

I've never personally seen anyone giving someone a higher rate just because of their race. It's blatantly illegal. It is perfectly legal, however, to discriminate based on credit.

However, and I'm sure this is mainly due to the fact that African Americans (and Hispanics), they seem to have worse credit (or more typically, a lack of traditional credit), more unstable jobs, and both races get higher rates, and are more likely to end up in subprime loans.

Much of that probably has to do with the targeted marketing to low-income neighborhoods and areas by the subprime companies. People who make less money are more likely to suffer hardship and credit problems when something goes wrong, like a broken vehicle, injury, job loss, as they are less likely to have had the ability to build a savings cushion to help out when something does happen. So, something goes wrong, you don't have cash savings to fall back on, payments get missed, and you're back in the poor cycle of paying higher rates and payments because your credit sucks. And because of those high payments, you can't save enough money to prevent the same thing from happening next time. And on it goes. And it's really quite unfortunate.

And, they may simply just believe what they are told when someone tells them that this is the best financing you can qualify for, you're lucky to get it, etc... If you have no other experience to go by, you'll likely believe it.

Personally, to me, everyone is green. My job is to find you the best financing package I can. Hopefully, it's the cheapest anyone will offer you, and you'll do your loan with me, and I get paid. No closing=no money.

The only way to know if you're getting a fair offer is to shop around. Every bank and broker has different programs, products, rates, etc... Some will be better than others. But if you talk to 3-5 different places, you'll get a good idea of who can offer you the best deal for your unique situation (and everyone's situation is unique). You'll hopefully find someone you feel you can trust to get you your best deal.

Good luck.

Terrence Said:

Home Mortgages?

We Answered:

because the banks are in the business of making money. they are businesses not government organizations.

this is just how it works - if a bank were to loan to another bank it would use a lower rate than consumer's rate because there is lower credit risk associated with the transaction, it works that way for foreign currency transactions too

individual consumer also pays more because the banks have to cover the overhead associated with the multiple small transactions

Diana Said:

Who else remembers waiting in line for gas for hours during the 70's or home mortgages with 21% interest rates?

We Answered:

i remember the carter years all too well...they say that because all too many voters weren't born at that time and don't care to learn history...the just want to believe democrats are always good

Gregory Said:

Why are interest rates for home mortgages rising?

We Answered:

Banks are in trouble have little money to lend. You have doubtless heard about Fannie & Freddie. Between the two, they guarantee over $5Trillion in US mortgages. Without a strong guarantor, limited capital, a declining economic picture, risks are very high for banks lending mortgage money. So interest rates have to increase dramatically.

Note that as soon as the "Fannie & Freddie Show" aired on the news, interest rates began escalating sharply.