Fed Cuts Interest Rates

Bankrate.com took a look to determine if the Fed's moves made you a winner or a loser. Here's a look at mortgages:

Winner: ARM holder or shopper
The decision by the Federal Open Market Committee (FOMC)
to cut rates by 25 basis points could be a boon for homeowners with adjustable-rate mortgages. It could mean your rate will go down, or at least not rise as much as it would have, the next time your mortgage resets.
Keep in mind the Fed already trimmed the federal funds target rate
by 50 basis points in September. The Fed's latest decision could cause your payment to take a dip if your mortgage resets within the next few weeks or months. Prospective homeowners shopping for an ARM also should find more attractive rates.

Winner: Fixed-rate shopper
It remains to be seen whether the decision by the Fed will help people shopping for new fixed-rate mortgages. Sometimes, fixed-rate mortgages move in tandem with short-term interest rates, but other times they do not.
The Fed's rate cut will have no impact on people with existing fixed-rate mortgages unless they are considering refinancing into a new mortgage, in which case it might help.

Take action
Now is a great time to take out a mortgage. Fixed-rate mortgages remain low by historic standards, and adjustable-rate mortgages are less likely to rise significantly now that the Fed is in a rate-cutting mode.