The effect of a rate cut

Today the Fed cut another .75% from the Federal Fund Rate and the Discount Rate. You don’t have to be a student of the machinations of the economic system to ask, “what’s in it for me?”

Twin Cities mortgage banker Alex J. Stenback, who writes a fascinating blog called Behind the Mortgage, documents recent rate cuts that correspond to an immediate rise in mortgage rates — at least in the short term.

Of course, as he notes, the biggest factor for a lot of would-be mortgage applicants is the availability of the money as well as demands for higher downpayments.

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