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Boat Loan Rates

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Old 01-18-2008, 03:41 PM
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Might as well share your source........
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Old 01-18-2008, 03:41 PM
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I would wait until the end of the month. The Fed is supposed to lower the Fed Funds rate......this wil lower short term interest rates like Home Equity Lines Of Credit (HELOC), credit cards, car and boat loan rates. The long term mortgage rates are not affected by this.

The bonds value changes the % rates for longer term mortgage backed securities (like a 15, 20, 30 yr fixed) When bond values are high, mortgages rates go lower and the opposite. Right now the FNMA (Fannie Mae) 5.5% 30 yr is at 101.28 and going lower..........which means that rates will slightly go up.
I'm not sure I totally follow here.

Why wouldn't pretty much all lending drop (eventually) with fed rate decrease? I mean, this is what rate banks borrow at from the reserve, correct?

I tend to think mortgage rates will still fall, probably very slowly, but definitely not rise in the next few months.
Maybe this is just wishful thinking though, I am planning a cash out refi to build my shop here soon.......

http://www.mortgage-x.com/trends.htm
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Old 01-18-2008, 04:10 PM
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I just did a MTI Cat with twin 1000's for 6.50%.
Wow What is the top SPEED of that cat? Is it the pleasure or the RACER version?

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Old 01-18-2008, 04:12 PM
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The upcoming rate drop will not impact the marine lending market in the near future. The fed has dropped the rate a total of 1.00% since September. When the Fed drops the rate it takes months to work it's way in the marine lending arena because banks that do marine lending price their money off of several different indicators. (T bills, 3yr treasury swap rate, bonds, etc...)

Since the Fed drop of 1.00% most banks have lowered their rates since September only .25% to .50%. One bank actually went up last month .25% because the indicators that they use to price their money have increased over the last 30 days. Marine lenders also make changes to rates VERY infrequently where as mortgages get re-priced daily.

Most Marine Lending banks in the short term will be keeping their rates where they are now because losses (boat repos) have up ticked slightly. With that happening, banks need to increase their loss reserve accruals to offset the increase in repos.

If the Fed continues it's current course and over the next 3-4 months reduce the Fed rate another .75% or 1.00% we could see marine lending rates drop to the mid to high 5% range in the spring of 2008.
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Old 01-18-2008, 06:21 PM
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I'm not sure I totally follow here.

Why wouldn't pretty much all lending drop (eventually) with fed rate decrease? I mean, this is what rate banks borrow at from the reserve, correct?

I tend to think mortgage rates will still fall, probably very slowly, but definitely not rise in the next few months.
Maybe this is just wishful thinking though, I am planning a cash out refi to build my shop here soon.......

http://www.mortgage-x.com/trends.htm
It can be confusing. As I mentioned earlier, the Fed changes the Fed Funds rate - this is the rate at which lending institutions (banks) charge each other overnight.

The rate at which banks borrow from the Federal Reserve is the Discount rate.
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Old 01-18-2008, 08:35 PM
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It can be confusing. As I mentioned earlier, the Fed changes the Fed Funds rate - this is the rate at which lending institutions (banks) charge each other overnight.

The rate at which banks borrow from the Federal Reserve is the Discount rate.
Ah. Hey, thanks for being cordial about it. Learn something new everyday!

Thanks.
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Old 01-18-2008, 11:29 PM
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Ah. Hey, thanks for being cordial about it. Learn something new everyday!

Thanks.
No problem.......and as Dave P mentioned-- it does take a few months to "trickle" down to the boat loan rates, it doesn't happen overnight.
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