The headline grabbed me. “Rate Cut Puts Whiff Of Re-Fi In The Air”. Oh wow. Mortgage rates were sliding before the fed announced their rate cut. Now even more people who couldn’t afford their mortgages before can get roped into new adjustable rate mortgages that they won’t be able to pay a couple years from now. Crazy.

Even before Tuesday’s 0.75% slash in the federal funds rate by the Federal Reserve, mortgage rates had been sliding. Last week’s cut pulled down home loan rates more.

The average rate for a conforming 30-year fixed-rate mortgage was 5.57%, according to Bankrate.com data released Jan. 23. Conforming loans are those for amounts up to $417,000. That’s down from 6.31% in late 2007. Rates averaged 5.75% as of Jan. 16.

So it’s increasingly attractive to take out a home loan or refinance an existing mortgage.

“It’s the largest four-week decline in nearly 20 years,” said Greg McBride, senior financial analyst at Bankrate.com.

At the current 5.57% rate, borrowers would pay $153 a month less on a $200,000 loan than six months ago.

Being in a fixed rate mortgage is the best thing that ever happened to me. While the rate is almost low enough to make re-financing more attractive to me, I doubt I will even look into it, as I am not in the mood to deal with all the crap that comes along with it, especially now.

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