HILLSBOROUGH COUNTY, Fla. — As part of our Price of Paradise series, we are taking a closer look at the Federal Reserve's recent decision to cut interest rates and what it really means for homeowners.
On Wednesday, the Federal Reserve announced a widely anticipated quarter percent cut to its benchmark interest rate. While many borrowers hoped this would translate into lower mortgage rates, mortgage rates actually ticked up a bit following the announcement.
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Rob Pinion with Guild Mortgage explains that the Fed’s decision does not directly affect mortgage rates. It is a range of factors that determine them.
Despite the recent uptick, Pinion emphasized that current mortgage rates are still relatively low compared to what we’ve seen over the past few years.
Just last week, the average 30-year fixed mortgage rate was around 6.35%, down from about 7% in January.
For current homeowners, the dip in rates could be an opportunity to save money through refinancing.
Pinion said, “Everybody is calling about refinancing; it’s one of the main topics.”
He said refinancing to a lower rate could save you hundreds of dollars a month, depending on your current loan.
“If you assume a 400 thousand dollar average loan amount. If you were to change your rate from 8 percent to 6.5 percent, you’re looking at roughly a $400-a-month savings,” Pinion said.
Pinion recommends homeowners talk with their mortgage professional to determine their personal strike point. That would be the interest rate at which refinancing makes sense. With that plan in place, homeowners can be ready to lock in a better deal with rates that align with their goals.
“It's been a little stressful. I don't know when I'll be able to do it.”
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