The Federqal Reserve decided to raise the Discount Rate from 0.5% to 0.75% last week. The increase took effect today Monday February 22, 2010. The Discount Rate is the rate the federal reserve charges bank to borrower money from the Federal Reserve. The Feds said they were keeping the Federal Funds Rate unchanged at near zero for an extended period of time.
The market was surprised by the Feds decision to increase the Discount Rate and responded by driving the yield on the treasury up. The Fed is also changing the loan term from 28 days to overnight. The Feds want to encourage banks to rely more on private funding and only use the Federal Reserve in emergencies.
Mortgage Rates did finish last week higher and the closer we get to March 31st could see rates move even higher. This is because the Federal Reserve is stopping their mortgage buying program on March 31st which has been the biggest cause of the low mortgage rates.
If you need to get qualified for a Delaware home loan for the purchase or refinance of a home in Delaware, feel free to call me at 302-703-0727 or send an e-mail to DelawareMortgages@yahoo.com.
We can help you with Delaware FHA Loans, Delaware VA Loans, Delaware Conventional Loans, Delaware FHA 203k Rehab Loans, Delaware Hard Money Loans, Delaware Commercial Loans, and Delaware USDA Rural Housing Loans.
John R. Thomas – Certified Mortgage Planner – Primary Residential Mortgage