Fed rate cuts and the government shutdown impact on mortgage rates and applications: notes from your local lender, Kevin Meador with Loan Depot
- sarahacraddock
- Nov 2
- 2 min read
The following are some notes from Kevin Meador, a local lender at Loan Depot regarding recent Fed rate cut and the government shutdown:
So what the heck happened yesterday with the Fed rate cut, because mortgage rates went slightly higher….
Mortgage rates are not directly tied to the Fed, they are more closely aligned with the 10 Year Treasury.
Around September, the mortgage world started to factor in an October .25% Fed rate cut. That’s when rates slowly dropped to levels we are at right now.
However, in the meeting yesterday, although the Fed Chairman Jerome Powell did cut the rate .25%, he also gave a less than enthusiastic prediction about larger cuts in December. This caused the mortgage markets pull back on their predictions that rates would continue to fall, and consequently rates increased slightly. Primary residence rates are still in the upper 5’s and lower 6’s.
Rates are lower than we’ve seen in a long time... We may be in this range through the end of the year depending on the many economic factors that affect mortgage rates….other than the Fed 😊
How does the government shutdown affect FHA/VA/USDA and the National Flood Insurance Program
The only loan program that is affected is USDA because we can’t get their approval at the end of the loan process due to the shutdown.
Because FHA and VA only guarantee the loan in case of future default, these loan programs are NOT affected.
MS Home Corp DPA is a state agency, so it is not affected.
If a property requires flood insurance and NFIP has to be involved with endorsing or transferring, this could be an issue also because of the shutdown. Each mortgage company will handle it differently. Our policy concerning transferring an existing policy would be determined by the effective date and the end date of the policy. If an insurance company can issue a new private flood policy, that would not be affected by NFIP.
The above notes are from Kevin Meador with Loan Depot.
If you have more questions about how the government shutdown may impact your loan application, contact Kevin. --Sarah Craddock, Broker Associate Blackwater Realty
Kevin Meador
NMLS #196596
Branch Manager
(228) 456-3149 – office
(228) 365-8690 – mobile
(228) 456-3149 – fax
955 Howard Ave, Suite D Biloxi, Mississippi 39530
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