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What Homebuyers Should Know About Falling Rates

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BY CRAIG GARCIA

President Donald Trump has advocated, and Federal Reserve board members have hinted, that the discount rate should come down in July or August. A cut has become expected due to uncertainty about the future of the economy due to slower economic growth, low inflation, and tensions surrounding a trade war with China and others. What does that mean for homebuyers?

The discount rate, which the Fed charges banks to borrow from it, directly affects the federal funds rate, which banks charge each other to borrow funds overnight. This bleeds through to the prime rate to which adjustable-rate mortgages and home equity lines of credit are often linked. The Fed raised its rate four times last year, with fed funds and prime rates moving in lockstep.

Fixed mortgage rates are an entirely different matter. Contrary to popular opinion, a Fed rate cut does not automatically translate into a drop for fixed-rate mortgages, the most desired type of home loans. Rates on 15-year and 30-year terms are not set by a governmental agency. Rather, they move with the buying and selling of mortgage-backed securities in the financial markets. These rates can change often several times a day, similar to stock prices.

Movement in the financial markets, including that for mortgage-backed securities, ends up being driven by investors’ expectations or, more precisely, changes in their expectations. When the market expects the Fed to lower rates, rates generally tend to come down along with expectations right away.

But not always. Ironically, many times a Fed rate cut can be followed by an increase in fixed mortgage rates. Why? One reason is as the Fed lowers its rate, it changes expectations about future cuts, and the market responds to those new expectations.

Short-term rate cuts can also fuel worries about long-term inflation. Investors and lenders become concerned that the rate drop will overstimulate the economy, driving up inflation. The Fed will respond by quickly ratcheting up rates. The market tries to anticipate that scenario by raising rates now.

As a lender, I am happy to allow the market to do the predicting. And it is not my position to encourage people to time mortgage rate lock-ins. Residential real estate is a home first and foremost, and a long-term investment secondarily. Homebuyers should not plan the next decade of their lives based on what the Fed does this summer.

The 30-year fixed rate has fallen to 3.82% on June 13 from a high of 4.51% at the start of the year, according to Freddie Mac. This is the lowest since September 2017 and suggests that homebuyers have a fantastic opportunity to secure a long-term, fixed rate.

Understand that when the financial markets are surprised by a stronger economy or inflation, rates will rise. And when they do, they tend to climb faster than they have fallen. Sometimes the party gets called to an abrupt end.

Craig Garcia is president of mortgage broker Capital Partners Mortgage, LLC, an affiliate of The Keyes Company, serving South Florida and the Treasure Coast.

Florida PR by BoardroomPR.com.

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Medicaid / Medicare Plan Administered Medically Tailored Meals – ILS Meals

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ILS Meals is the national leader in home delivered meals and nutrition services, serving high-quality medically tailored therapeutic meals to
healthcare patients, seniors, and children. We believe in the vital role of nutrition to improve the health and quality of life. ILS Meals menus are designed by our team of registered dietitians to foster independence, aid in recovery or reduce the symptoms of a chronic illness.
ILS Meals has over 18 years’ experience serving the Medicare Advantage, Medicaid, pediatric, and special needs populations throughout the United States and its territories. Our meals are designed with care to improve health outcomes, lower readmission rates to acute care settings, improve nutritional health status, address social determinants of health, and foster independence.

Healthy Food Delivered
Our Registered Dietitians design all medically tailored menus with passion, and expertise in a delicious array of cultural and religious cuisines. They insist on using only the freshest seasonal ingredients. All meals are flash frozen “Nature’s Pause Button” so everything stays just the way we made it!

ILS Meals is dedicated to providing healthy, delicious and nutritious meals that heal and empower
ILS Meals is the national leader in home delivered meals and nutrition services, serving high-quality medically tailored therapeutic meals to healthcare patients, seniors, and children. We believe in the vital role of nutrition to improve the health and quality of life. ILS Meals menus are designed by our team of registered dietitians to foster independence, aid in recovery or reduce the symptoms of a chronic illness.

Medicaid / Medicare Home Delivered Meals

ILS Meals has over 18 years’ experience serving the Medicare Advantage, Medicaid, pediatric, and special needs populations throughout the United States and its territories. Our meals are designed with care to improve health outcomes, lower readmission rates to acute care settings, improve nutritional health status, address social determinants of health, and foster independence.

 

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South Florida Medicaid Meals Home Delivery – Independent Living Systems

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Founded in 2001, Independent Living Systems (ILS) was formed to assist health plans and other organizations in the delivery of community based services as an alternative to costly institutional based care.

Miami home delivered Medicaid meals 

In developing and implementing one of the country’s first long-term care diversion program in the country, we learned that nearly 70% of people residing in nursing homes would not need to be there if they had access to community based resources to support them. With an average cost of a year-long stay in a nursing home at $60,000, ILS developed the Managed Long-Term Services and Supports Program to reduce those costs to an average of $25,000. Improving costs and quality, combined with a patient’s preference to live at home has been the driving force behind the development of our future services.

LS is one of the nation’s largest nutritional providers delivering high-quality dietician-designed meals to the elderly, special needs, and at-risk populations. Members receive dietary menus that are tailored to the health care needs of the recipient.

ILS meals help individuals achieve their nutrition goals at critical times to help them regain and maintain their health. The results include improved member health outcomes, lower hospital readmission rates, a well-maintained nutritional health status, and increased member satisfaction.

South Fl Chronic Care Nutrition Programs

  • Lower chronic disease risk
  • Slow disease progression
  • Reduce disease symptoms

Needs-Based Nutrition Support – Diabetes Meal Delivery in Miami

  • Address social determinants of health
  • Reduce ER visits
  • Improve overall health

Care Planning & Care Management
Member engagement and individualized planning to promote the right blend of cost effective services for improved health outcomes and member satisfaction.

Assessments
Extensive library of integrated industry and proprietary assessment tools to support holistic evaluation of an individual’s needs to achieve good health outcomes and foster independence.

Management of Services and Care Authorizations
Automated process for identification of need of clinical and social services, utilization management, authorization systems and reporting.

 

More info on: South Fl Management of Services and Care Authorizations and regulatory reporting

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Miami Fl Home Insurance Dispute Law Firm

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INSURANCE LITIGATION GROUPHelping Homeowners Deal with their Insurer When Disaster Strikes

We are driven professionals who support and cultivate a satisfying work environment that encourages growth based on mutual respect, teamwork, open communication, accountability, and loyalty. We adhere to the ILG policies and ethical values and deliver exceptional customer service to our clients and team members. We uphold and promote the ILG standard, where experience and rapid results matter™.

The attorneys at the Insurance Litigation Group, P.A., focus their practice entirely on insurance litigation. Our Team of well-prepared lawyers, loss assessment specialists and Field Operators are devoted to their clients to make the difference in how your case is resolved and your financial recovery.

Florida home insurance policy owners should know that no two insurance carriers’ policies are alike. Each home insurance policy is written by a team of insurance company legal experts to meet the financial and legal risk profile that the company wishes to accept for the premium paid. The State of Florida does regulate the insurance industry and many terms of coverage are protected by law but there can be many areas of exclusion and payout limitations that are specific to each contract. When a claim is disputed, it’s easy for a consumer to feel overwhelmed their friendly neighborly insurance agent isn’t in the process it’s done by the claims department which has an entirely different agenda than the sales agent.

Top Rated – Miami Home Insurance Law Firm 

In the event that your home is damaged or destroyed by a hurricane or severe storm, fire, water or mold damage, or other events, don’t be surprised if the insurance company’s first reaction is to respond in one of the following ways:

  • Claim that your damage is due to some pre-existing condition
  • Assert that your claim is not covered under the terms of your policy
  • Offer you a low settlement amount that does not cover your losses
  • Allege that your claim is fraudulent, or that you did not keep up with your premium payments
  • Fail to investigate or respond to your claim
  • Cancel your policy based on recently-discovered “errors” in your application

We are a client-focused law firm that fights aggressively on behalf of residential and commercial policyholders, contractors, restoration and mitigation companies, to produce maximum recovery results from insurance companies through our unique expertise, deep understanding of insurance law, cutting edge technology and proactive approach to litigation. Call statewide in Florida today at: 786 529-0090. 

Other Florida Markets Served:

Orlando Homeowners Insurance Lawyer

Pensacola Home Insurance Law Firm

Fort Pierce Home Insurance Dispute Attorney

 

 

 

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