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Originally Posted by kurty[B]
Thanks No-Soup, I figured there was much too much involved to really guess what the Fed is going to do.
Decided last night to kind of see what the weather does here. If the ground freezes before they can get the foundation in, then I'll lock in a rate (that would push finshing of the home back into later in the summer). If they are able to get the foundation in, then the home should be finished relatively early in the year, and we decided in that case not to lock in a rate. I'm sure more questions will be coming up.
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I think you need to learn more than your friend taught you about mortgages. Stop worrying about what the Fed is doing. Your mortgage rates will roughly track what the 10 year and 30 year bonds are doing, not what the Fed is doing on the short end of the yield curve. You're not looking at doing short term borrowing, so stop being so concerned with the cost of short term borrowing.
The Fed has been raising rates for quite a while. The long end of the curve (ie 10's and 30's) has seen a dramatic FALL in interest rates over the past few months. That's what you need to be focused on. The Fed has the ability to influence the short end; Alan Greespan admitted a few years back that the long end was beyond their control, even though that's often what they're targeting when they manipulate short term rates.