topic Re: FEDS CUT INT RATE .50%... ??? What does this mean to the consumer?? in Credit in the News

FEDS CUT INT RATE .50%... ??? What does this mean to the consumer??

Anonymous — Wed, 29 Oct 2008 18:24:23 GMT

Can I now re-finance my house for a 4% loan, or even 5%? Currently at 6.0 fixed......

Re: FEDS CUT INT RATE .50%... ??? What does this mean to the consumer??

MidnightVoice — Wed, 29 Oct 2008 19:15:03 GMT

Probably not.

Mortgage rate is not tied to prime rate

Re: FEDS CUT INT RATE .50%... ??? What does this mean to the consumer??

fused — Wed, 29 Oct 2008 21:22:41 GMT

I don't get it, why is the Fed cutting rates when we are in a deflationary period?

Re: FEDS CUT INT RATE .50%... ??? What does this mean to the consumer??

MidnightVoice — Wed, 29 Oct 2008 22:05:15 GMT

To try and keep credit flowing?

Re: FEDS CUT INT RATE .50%... ??? What does this mean to the consumer??

fused — Wed, 29 Oct 2008 22:20:42 GMT

I don't believe it will work. Liquidity is not the issue, the issue is banks are hoarding cash to ensure they have enough to cover their bets on defaulting swabs and other mortgage derivatives.

Re: FEDS CUT INT RATE .50%... ??? What does this mean to the consumer??

moods — Thu, 30 Oct 2008 04:57:52 GMT

does this mean all our revolving accounts go down .50%? (I mean thats how they calculate the % right prime rate plus whatever they add?

Re: FEDS CUT INT RATE .50%... ??? What does this mean to the consumer??

haulingthescoreup — Thu, 30 Oct 2008 14:06:48 GMT

moods wrote:
does this mean all our revolving accounts go down .50%? (I mean thats how they calculate the % right prime rate plus whatever they add?

If your APR is linked to the WSJ prime rate, yes.

Same with HELOC's.

Although some banks were smart enough to specify a minimum below which the APR would not go, no matter what happened with the prime rate. Betcha they forgot to put in a maximum, though.