Whcih way is your mortgage interest rate heading?

Many people assume that when the Fed cuts interest rates it will lower mortgage interest rates, but this is a misunderstanding. Long term mortgage rates are not tied to short-term treasury notes.

The Federal Reserve cut interest rates by three-quarters of a percentage point Tuesday, but don't expect mortgage rates to go down too. In fact, home loans could be heading higher.

Long-term mortgage rates (30 year) are tied to inflation concerns and not the Fed rate.

But, your Adjustable Rate Mortgage interest rate may lower because there is more of a connection between ARM’s and the Fed rate.

Related articles

• Pain relief for mortgage flare-up
• Fed to crack down on shady lenders
• Home Foreclosures Hit Record High
• Record Number in U.S. Lost Homes in '07