Archive for the 'Federal Reserve' Category

Every once in a while you will come across advertisements on “all-time” low mortgage rates. Most of the time, these type of mortgages are given to people with good credit standing and control of their personal finances. But what if your credit score is not something that you can be proud of? How do you get your mortgage?

In cases like this, people would usually resort to a subprime loan since they cannot get loans with prime rates.

What are Subprime Loans?

Subprime loans are offered to individuals who have less than attractive credit history or scores. When you cannot qualify for the prime rate financing, it is highly unlikely that you will get the kind of loan that you want. Mortgage companies have exact requirements for prime mortgage loans. Basically, approval for loan despite bad credit score is the classic feature of a sub prime.

What is the drawback to these kinds of loans? Since financing companies know that loan default rate is very high when you have bad credit score, they usually charge high interest rates for subprime loans. This often translates into a bad personal finance setup for many people. Usually, however, the interest rate varies depending on how bad your credit score is.

Selecting a Lender

You might not be able to do anything about your credit score at the moment, but you have a choice as to your lender. There are companies that primarily specialize in these types of loans. There are traditional mortgage companies that are venturing into subprime loans. Make sure that you place a quote request with various lending companies before settling with one. By doing this, you may still get a great deal despite your credit score. You may still minimize the effects to your personal finance.

One key point however is that you must pay up your monthly installments on time or risk losing your property.

Most of you would have thought “the Fed cuts rates, stocks are going to jump higher and higher.” Similar to what they’ve been doing over the past week or two. The stock market has been on the rise.

But today, when the Feds announced a quarter point cut stocks plummeted. I mean dropped like a rock, loosing almost 300 point overall. This after a morning of strong movement upwards.

Stocks like Google, GOOG, went from being up $5 to dropping nearly $20. Almost everything else followed suit, on the NASDAQ and the NYSE stocks just dropped.

The reason being, is because there was a general though that Feds would drop rates a half point and they didn’t. We’ll see how things rebound tomorrow.

The Federal Reserve raised the interest rate to 5.25 %, the highest it’s been in 5 years on Thursday after the end of a two day meeting in Washington.

Fed Chairman Ben Bernanke and other policymakers talked about the need to raise interests rates this time around to fend off the continued inflation that is occurring in the US economy. They also hinted the more interest rates hikes might be needed to fend off still more inflation over the next year.

This news came and gave the DOW a sizeable boost in early morning trading and ended the day up over 215 points, with the NASDAQ following suit at up 62 points. Gold and silver were both up as well on news of interest rates increases from the fed, trading on these commodities continues worldwide throughout the day and night.