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Feds lower interest rate
Old 10-31-2008, 03:44 PM   #1
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Feds lower interest rate

http://finance.yahoo.com/banking-bud...ould-Be-Coming

So if the Feds lower the interest rate does that mean people with an existing mortgage can renegotiate their APR? What about credit cards?
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Old 10-31-2008, 03:52 PM   #2
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It depends on whether the credit unions & banks follow the Fed with interest-rate reductions of their own. Sometimes they follow lockstep, other times they wait to see what their competitors do, other times they offer sales that have nothing to do with the Fed's actions, and sometimes they don't change.

PenFed lets you set a mortgage watch on their rates, and you get an e-mail when they meet your criteria. BankRate.com also keeps an eye on mortgage data...
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Old 10-31-2008, 04:13 PM   #3
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In the case of HELOC Loans which usually are set to an index rate like the "Prime Rate" (can be found by looking for the WSJ Prime Rate (Wall Street Journal)). Usually, the HELOC has a specific time to reset to the then current Prime Rate (Plus or Minus some percentage). This information is spelled out in your HELOC documentation. As an example our PENFED HELOC resets quarterly (in December, March, June, September) and is the Prime rate (which is 4% as of 10/29/2008) minus 1/2 percent. So we are looking at 3.5% for the quarter starting in December 2008.
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