Fed cuts Rate to 1%

WASHINGTON (MarketWatch) - The Federal Reserve on Wednesday slashed overnight interest rates by a half-point to 1.0%, and left the door open for more reductions which would bring rates to the lowest levels in a half-century.
In its statement, the Federal Open Market Committee said the pace of growth has slowed "markedly" and the extraordinary financial market stress could put the economy at greater risk.
With inflation no longer a threat, the central bank said it will cut rates as needed to boost the economy.
The FOMC said it "will monitor economic and financial developments carefully and will act as needed to promote sustainable economic growth and price stability."
Importantly, the Fed statement drew no line in the sand at the 1% funds rate target, raising the possibility that rates may move lower.

Are we getting closer to a Real Estate bottom?

WASHINGTON (MarketWatch) - Sales of new homes rose an estimated 2.7% in September to a seasonally adjusted annual rate of 464,000 in September, the Commerce Department reported Monday, close to the 460,000 pace expected by economists surveyed by MarketWatch. Sales surged 23% in the West, bouncing back from a similar decline in August. Nationally, sales in September were down 33% compared with September 2007. The inventory of unsold homes fell a record 7.3% in September to 394,000, the lowest in four years. In the past year, inventories have fallen 25.4%, the biggest drop since the government began tracking the data in 1963. The median sales price fell to $218,400, down 9.1% in the past year.

Mortgage rates are still low.

NEW YORK (MarketWatch) -- U.S. fixed-rate mortgages declined in the latest week, according to Freddie Mac's survey released Thursday. The national average interest rate on the benchmark 30-year, fixed-rate loan averaged 6.04% in the week ending Thursday, down from last week's 6.46% and the year-ago 6.33%. The 15-year fixed-rate loan averaged 5.72%, down from the week-ago 6.14% and the year-ago 5.99%. The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 6.06%, compared with 6.14% a week ago and 6.03% a year ago. One-year Treasury-indexed ARMs averaged 5.23% this week, up from last week's 5.16% and down from the year-ago 5.66%. "Long-term mortgage rates fell this week amid news of tame inflation and a weaker housing market," said Frank Nothaft, Freddie Mac vice president and chief economist.

This is a great opportunity for home buyers in this market. This is also great for those coming close to the end of a fixed term period for refinance. If you have any questions about your specific situation please get in touch with us. We will give you the best advice for you.

Is there hope?

WASHINGTON (MarketWatch) -- Despite a credit crunch that has driven world central banks to slash interest rates, the National Association of Realtors reported Wednesday that an index of sales contracts on previously owned U.S. homes rose 7.4% in August from the prior month. The index, which is considered a leading indicator of existing home sales, was up 8.8% from the prior year. In August pending home sales rose in all four regions, with a gain of 18.4% in the West, 8.4% in the Northeast, 3.6% in the Midwest and 2.3% in the South. The July pending home sales index was revised to a decline of 2.7% from a prior estimate of a 3.2% fall.

These are positive numbers on the surface but there is a lot yet to be considered before any claims of a housing market is on the rebound.

Refinancing can still be a smart decision

Refinancing your home may accomplish a number of financial goals:

Lowering your interest rate may save money on your monthly payment.
Reducing the term of your mortgage may save tens of thousands of dollars over the life of the loan while increasing slightly higher on monthly payments.
Refinancing an ARM or a balloon to a fixed rate may eliminate the uncertainty of shifts in interest rates.

At Cascade Financial & Co., we offer a variety of refinancing packages to suit the needs of our customers, and we welcome the opportunity to work with you to find the right mortgage. The right option for you will depend on a variety of factors pertaining to your specific situation - one of our mortgage professionals will help you choose the best loan package.

Considering the following factors can give you a head start in deciding which type of refinance option to choose:
1. How long you plan to remain in the house?
2. How long you have been paying on your current mortgage?
3. The current rate and term of your mortgage?
4. Whether you have a second mortgage or home equity line of credit?
5. How much equity you have in your home?
6. Whether it will be beneficial to consolidate other debts into your mortgage? (this can depend on the amount of equity that you currently have in your home)