Fed cuts “rates” to 0%! Mortgage rates UP???

That’s not typo. Mortgage rates are UP, while 99% of the public thinks they’re headed down. When you read or hear, “The Fed cut rates to 0%,” that rate only applies to overnight loans between banks, NOT mortgages. The Fed Funds rate was 0% for 7 years, from 2008 to 2015, and 30-year fixed rates were between 3.25% and 4.5%, NOT in the 2’s.

During the last few days of last week, the normal institutional buyers of fixed-rate mortgages and U.S. Treasuries were simply saying, “No thanks, we’re not buying today,” causing mortgage rates to go higher instead of lower.

So in an effort to stabilize the mortgage and U.S. Treasury markets and get rates moving back down, the Federal Reserve also announced on 3/15/20 it would start buying “at least” $700 billion of U.S. Treasury securities and mortgages backed by Fannie Mae, Freddie Mac and FHA.

Mortgage “factory capacity” is another factor. Even before market conditions pushed mortgage rates up, lenders were raising rates to slow down new application volume because their “factories” simply could not handle any more volume.

What Accunet is doing.

  • We are prioritizing our capacity for home shoppers to whom we’ve issued pre-approval letters, especially Rock- Solid Guaranteed Pre-approval letters. We’re also prioritizing issuing pre-approval letters to new home shoppers.
  • Next, we’re prioritizing helping our past clients with their refinances.
  • When we have additional capacity, we are responding to inquiries from potential new refinance customers.

What you can do.

  • If your loan is already in process and locked with Accunet, please don’t call to see if we can drop your rate because of the Fed rate cut. Your rate is already lower than current market rates.
  • If you’re a past Accunet customer or a friend/relative of a past or current Accunet customer, and you have not yet started the refinance process, you can get started, but wait to lock your rate until they hopefully come back down.
Mortgage LoansRateAPR
30 Year Fixed3.375%3.483%
20 Year Fixed3.250%3.372%
15 Year Fixed3.250%3.445%
10 Year Fixed3.500%3.761%
VA 30yr Fixedn/an/a
FHA 30yr Fixedn/an/a
5/1 ARM3.125%3.125%
7/1 ARM3.250%3.250%
10/1 ARM3.750%3.458%
4/6/2020 12:00
* Rates above are for a $200,000 loan.
Jumbo LoansRateAPR
30 Year Fixed Jumbo3.750%3.807%
5/1 ARM Jumbo3.000%3.000%
7/1 ARM Jumbo3.375%3.375%
15 Year Fixed Jumbo3.250%3.310%
4/6/2020 12:00
08/10/2018 09:00

* Rates above are for a $650,000 loan.