Interest Rates Are Near 0%, How Does This Affect Mortgages?

How are mortgages affected by the Federal Reserve cutting its target interest rate to next to nothing?

The Sunday announcement by the Fed brings the federal funds rate to between 0% and 0.25% and was designed to stimulate the economy by making it more affordable for everyday people to borrow money for buying a first home, refinancing to lower your current mortgage rate or taking out a home equity line of credit, among other things.

“The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals,” said the Board of Governors of the Federal Reserve System’s Federal Open Market Committee in a written public statement. “This action will help support economic activity, strong labor market conditions, and inflation returning to the Committee’s symmetric 2 percent objective.”

Visit our real estate center and call our mortgage loan officers at (301) 933-9100 ext. 104 to get your questions answered about how the recent drop in interest rates benefit you and your mortgage rates.