How exactly does this work : The feds drop rates to banks @3%, no effect on mortgages,wheres that $$ going?
How exactly does this work : The feds drop rates to banks @3%, no effect on mortgages,wheres that $$ going?
mortgages
- Stay Connected
- Latest Posts in RSS
- Antique Insurance
- Auto Loans
- Auto Loans Q&A's
- Bankruptcy
- Car Insurance
- Commercial
- Consolidation Loans
- Credit Card Q&A's
- Credit Cards
- Credit Repair
- Foreclosure
- Government Grants
- Health Insurance
- Home Insurance
- Home Loans
- Identity Theft Insurance
- Insurance
- Insurance News
- Insurance Q&A's
- Landlords Insurance
- Loan Modification
- Loan News
- Loan Q&A's
- Loans
- Mortgage News
- Mortgage Q&A's
- Mortgages
- News
- Personal Injury
- Pet Insurance
- Refinancing Home Loans
- Secured Loans
- Student Loans
- Term Life Insurance
- Travel Insurance
- Unsecured Loans
- Young Drivers Insurance
- Latest Comments in RSS
- Latest Posts in RSS
- /
It goes into the coffers of the banks. That’s how they cover bad debt and future expansion.
Fixed mortgage rates do not rely in great part on the Federal Reserve rate. They are much more closely tied to long term issues, such as Treasury notes and bonds. Assuming that the Fed stays where it is for a period of time, one can expect that such rates will eventually trickle down to the Treasuries and Bonds.
Give it a month or two of observation.
What money are you talking about?
There is usually a delay between when the Fed drops the rate and when other rates follow (mortgage, credit card).
You are under the misguided idea that mortgage rates are directly tied to fed funds rates. Ain’t necessarily so.
Where else? To the banks!! If in doubt, banks win. It’s a trickle-down effect on mortgage rates.
Where is the money going?
Not sure what cave you have been living in, but SOMEONE has to offset the RECORD number of foreclosures.
Banks don’t lose money on all of them, but they do on most of them.
You are making the mistake alot of people make by thinking one rate DIRECTLY affects the other.
Banks are under NO OBLIGATION to pass that savings onto the consumers unless it makes good business sense to do so…and right now it doesn’t make business sense to drastically cut rates for mortgages like banks did post-9/11.
That is no different, than if a merchant got a good deal on merchandise that they bought wholesale, that they pocket the profit instead of passing those savings on.
Yup, that horse is pretty well beaten to death…Moving on…