The Federal Open Market Committee adjourns from its 2-day meeting at 2:15 P.M. ET today. It's widely expected that the Ben Bernanke-led FOMC will reduce the Fed Funds Rate by a half-percent to 0.500 percent. Fed Funds Rate cuts are meant to stimulate the economy by lowering borrowing costs for businesses and consumers; interest rates on business credit lines and consumer credit cards are directly tied to the benchmark rate. However, it won't be what the Fed does today that will be as important as what the Fed says.  And the markets are listening closely.  See, this FOMC meeting ...

Mortgage markets improved last week, riding a steady stream of negative news into its best levels of the year. Day-to-day, mortgage rates priced across a very wide range, but managed to close out the week lower overall. Mortgage rates improving on "bad news" is a break from the trading patterns of September and October.  Back then, even the slightly evidence of a recession caused mortgage rates to soar.  Now, however, markets have accepted economic weakness and have started to look to the future.  Not even sagging retail sales and the rising ranks of the unemployed could quell ...

A mortgage is a contract between a bank and borrower, defining the terms by which a home loan must be repaid.  The paperwork, signed by both parties, includes provisions for things like: The interest rate The length of the loan The amount of money to be borrowed But, like all loans, a mortgage loan can be paid off at any time.  So, when market interest rates fall, homeowners will often exercise their right to an "early payoff" by securing a new loan that pays off the old one. This process is most commonly known as a refinance. A refinance is the changing of the loan ...

It's the age-old question for home buyers in need of a mortgage: Which is better: Fixed or ARM? Historically, the answer has hinged on a homebuyer's desire to meet one of two mutually-exclusive mortgage financing goals: Get low mortgage payments for better cash flow Get long-term payment stability for better budget planning But because of government invention and lingering questions about the economy, fixed-rate mortgages are now pricing cheaper than their adjustable-rate counterparts. Based on today's mortgage market, therefore, home buyers can get both. Versus a ...

For most Americans, mortgage interest paid on a home loan is tax-deductible in the year in which it was paid. With advance planning, therefore, homeowners can increase their 2008 tax deductions and limit their tax liability on April 15. The key is to make the January 2009 mortgage payment before the New Year begins. In making the payment in 2008, the payment's mortgage interest is applied against this year's tax deductions instead of next year's.  And lest you think you're paying "in advance", remember that mortgage interest is paid in arrears; a payment due January 1 accounts for ...

Earlier this year and under pressure from the government, mortgage lenders made more than 200,000 loan modifications to delinquent homeowners.The modifications came in one of three forms, or a combination: Interest rate reduction Loan term extension Principal forgiveness But despite the modifications, as of October 1, more than half of the homeowners that received assistance were already two months behind on their modified monthly payments.  This late-pay statistic was a focal point on Capitol Hill yesterday as the government admitted delinquencies "were larger than [they] ...

In a week in which mortgage markets struggled to find direction, mortgage rates edged higher overall.  The weekly increase was the first since mid-November and it may signal higher rates as we head into 2009.The week's most talked-about story hit the wires Friday.  According to the government, the U.S. economy shed 533,000 jobs last month and the national Unemployment Rate rose to 6.7%.  This was the largest number of jobs lost in any one month since the recession of 1974. In a normal market, job losses of this magnitude would have caused stock markets and mortgage rates to ...