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Another rate cut is upon us. As had been expected, Fed Chief Ben Bernanke cut the federal funds rate for the second time in two months, to 4.5% now from 4.75%. One can debate whether this meddling in the market is a good thing. Cutting rates to 1% a few years ago was clearly a bad thing. It resulted in a period of massive asset inflation and speculation. Now, it can be argued, the Fed is trying to bail the country out of the mess it made.
Regardless of whether the cuts are a good move, everyone should take advantage of the situation. Rates are low by historical standards. The Consumer Credit Counseling Service of Greater Atlanta, which offers consulting services to folks in distress, had these bits of advice for borrowers. 1)Check out all of your borrowing sources, credit cards, home equity loans and make sure rates are coming down and that you’re getting the lowest rate possible. 2) Consolidate debt to get that best rate across all of your loans. 3) If you’re in an adjustable mortgage that can spike, look at refinancing into a fixed term loan. 4) Finally, and this depends on the local market, it may be a good time to buy property. There a quite a few cities where home prices have gotten whacked. It’s a buyers’ market right now.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.