Many believe that as soon as the overnight federal funds rate is lowered, mortgage rates offered by lenders should automatically be lowered. Here is a graph that tracks historical movement between Federal Funds and mortgage rates. Mortgage rates respond to economic growth and inflation pressures. Here’s a link that may help explain this correlation: http://library.hsh.com/?row_id=91

Banks are also looking at costs and so the "pull thru" ratio on locked loans are going to be closely watched by all lenders.  Locking a loan and not closing could jeopardise our relationship with investors.  So it is very important that the we and our clients work together at following thru with closing loans that have been locked.

My best advise to you if you're seriously considering refinancing and taking advantage of the lower interest rates; apply online and complete our loan package.  HUD 184, FHA and VA Streamline refinances do not require you to provide bank statement, income statement or appraisal.  We will need the banking loan application and disclosure.  With these in hand, we will monitor the rates to lock your loan for you once rates should drop.  All other loan types that are not "Streamline" will require income, assets and appraisal to refinance.  Purchase loan genrally are not locked until we have an accepted offer.  Please reply to this blog is you should have any further questions.