INTEREST RATE INFO

We read the following news alert and immediately called Tricia Morris for her comments as we are very concerned about interest rates increasing and the impact it would have.  Below is the news alert and also Tricia’s response:

NEWS ALERT:

Federal Reserve Raises Interest Rate Charged to Banks, In First Move Since 2008

 

The Federal Reserve, taking its first step to return lending to normal after more than two years of extraordinary actions to prop up the economy, on Thursday raised its discount rate

— the interest rate it charges on emergency loans to banks

— by one-quarter percentage point.

 

The increase, to 0.75 percent from 0.50 percent, takes effect on Friday.

 

Officials said the move was not meant to be a broad tightening of credit. Rather, they said, it was intended to discourage emergency borrowing when other financing is available to banks.

 

The discount rate had been at 0.50 percent since December 2008.

TRICIA’S RESPONSE TO THE QUESTION ABOUT WHAT NOW WITH RATES?

 It’s been anticipated for some time that the interest rates would be going up.  This will probably happen for a couple of reasons.  The Government has been subsidizing the low rates and continued lower rates would be inflationary.
It has been announced that the Government would stop buying mortgage backed securities at the end of March and now it appears that an increase in the discount rate is also imminent.  This is the rate that determines the cost of funds for banks.
There’s no question that now is an optimal time for obtaining a mortgage loan and anyone that is interested in purchasing would do well to take advantage of the current interest rate.
Much Aloha,
Tricia
Hawaii’s Premiere Mortgage Company
535 Lipoa Parkway, Suite 101
Kihei, Hawaii  96753
808.874.8800 x116 / 800.813.7711 x116 / Fax: 808.874.1188
mailto:tricia@mortgagemaui.com
Hawaii’s Premiere Mortgage Company