8 Questions Your Lender Should Answer About Mortgage Rates
- Who controls mortgage rates, and what are they tied to?
Mortgage interest rates are determined by the pricing of mortgage backed securities, mortgage bonds, the current market environment and the risk characteristics of a specific loan.
- How often do mortgage rates fluctuate?
Mortgage rates can sway throughout the day; this can be dependent on the days when the Bond markets are trading securities since mortgage rates are generally tied to Mortgage Bond prices.
- What causes mortgages rates to go up and down?
Mortgage Bonds are largely affected by various market forces that influence the changing demand for those bonds within the market.
- What do you use to monitor mortgage rates?
There are several great subscription based services available to monitor Mortgage Bond prices.
- When the Federal Reserve changes the rates, does it affect the mortgage rates?
Mortgage Rates are not necessarily tied to the movement of the Federal Funds rate.
- Do different programs have different interest rates?
Conventional, Jumbo, FHA and VA loans can all carry different rates on a 30-year fixed mortgage.
- Why is an Adjustable Rate Mortgage rate lower than a fixed rate mortgage?
ARM mortgages have a rate of interest that is adjusted periodically to reflect market conditions. The rate is typically lower at the beginning of the loan term and will adjust on a predetermined basis
- Why are rates higher on different property types and loan features?
Risk characteristics also determine interest rates on loans.
Don’t get left with unanswered questions. Buying a new home is a big decision and I am always available to help you along the way. Feel free to reach out to me today!