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Article: Mortgage rates won't fall just because of Fed cut
- Article from:
- Chicago Sun-Times
- Article date:
- June 26, 2003
- Author:
CopyrightCopyright 2003 Chicago Sun-Times. (Hide copyright information)
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Now that the Fed has lowered interest rates, will mortgage rates
sink even lower? They might. But if they do, it won't be because of
what the Fed did, but what the Fed said.
There's a common misconception among consumers that if the Fed
cuts its target for interest rates, then mortgage rates will fall,
but that's not the case. Tom Ward, president and founder of Majestic
Mortgage Corp., a mortgage banker headquartered in Mundelein, knows
that when the Fed cuts rates, customers will call asking whether they
can get a lower mortgage rate.
"We've probably had 50 calls today," Ward said an hour after the
rate cut announcement at 1:15 p.m. Majestic is prepared with a
standard explanation of why, ...