Mortgage loan rates expected to drop significantly, how to strategize | KTVU

With the Federal Reserve expected to begin lowering interest rates next week, more people will be considering whether it's time to buy or sell a house. KTVU's Tom Vacar spoke to a loan officer about the strategies that buyers and sellers should consider. Even without a Federal Reserve interest rate cut, mortgage interest rates have hit an 18-month low. The Senior Vice President of Origin Point Lending explains. The rates dropped before even the Fed announcement because we are expecting a minimum of a quarter percent drop. Fact is, lenders cannot make money unless they lend it to the relatively few folks now who feel they can afford it. So, to finance loans, lenders price compete with other lenders. We do expect rates in 24, the remainder of 24, and in 25 to drop significantly. You know, predictions are in the mid-4s. So should you wait it out for lower rates or buy now and then refinance? I would say that if you wait for that extra quarter, that extra half, that extra three quarters of a percent drop, you know, now you might be facing, if you're buying, a bigger slew of buyers, which will drive the home prices up. And to that, some homeowners with mortgage rates in the 4% range may decide to sell and accept a slightly higher rate elsewhere. That would put more homes on the market, but it would also put a lot more folks bidding up those prices for them. As rates go down, do not assume that you will get the rate advertised by the lender. Those rates are usually reserved for the most qualified buyers. And there's so many factors. Your credit score, the type of property you have, the amount of equity you have, whether you're self-employed and your debt-to-income ratio. There's just so many factors that affect the interest rate. The Fed will do what the Fed will do. But everyone, consumer and business person alike, is always looking for clues. Finance pros look only one place. So the most important thing that we're going to listen to, and it's going to be the biggest market mover, is Jerome Powell's comments. However, one enormous borrower, Uncle Sam, will also compete. Because for the first time, the annual interest payments on the national debt will surpass $1 trillion taxpayer dollars. That's enough to buy 2.8 million median-priced U.S. homes. Tom Vacar, KTVU, Fox 2 News.