What Causes Mortgage Rates To Change?
I’m on a lot of mailing lists, which usually get sold and result in my getting a ton of spam. Most of it is effectively filtered out, but sometimes “relevant spam” filters through. Here’s an interesting example from a mortgage company.
Did you know that one or more rate changes per day is normal? Most people do not know that. Rate quotes can easily change when you call back later that same day. In the lending business, a rate change can also include a change in the point cost for the same rate. In other words, a rate can be no points in the morning, then later that day cost ¼ point. That is a rate change to lenders. Did you also know that regular fixed mortgage rates are not directly affected by what the Fed chairman Ben Bernanke does?
Mortgage rates change primarily based on:
1) the perception of inflation,
2) times of uncertainty and
3) the movement of money in and out of the stock market–that’s it.When a piece of news shows weakness or uncertainty in the economy, that helps rates fall. The opposite is also true. A drop in the unemployment rate, a rise in durable goods orders, a rise in the consumer confidence index–rates go up.
These influencing factors can present themselves all the time, many without warning, affecting mortgage rates instantly. There is no “delay”. It doesn’t take time to “filter down” like some people think. Reading the paper for quotes doesn’t really work because the information is old by the time you read it. Radio, TV and billboards are not the answer because the details are always missing. They just want to get you on the phone. Competitive lenders can deliver nearly identical rates to each other. Most borrowers don’t ask the right questions and focus only on the interest rate. A professional will always be competitive and deliver what is promised.
To really know about your mortgage I strongly recommend How to Save Thousands of Dollars on Your Home Mortgage. My dog-eared copy is currently vacationing in Egypt with a friend. Its not difficult to understand and is a great resource.
If you found this post helpful, consider donating to my coffee fund!![[del.icio.us]](http://images.del.icio.us/static/img/delicious.small.gif){kind=small}
- Living off dividends [or how to invest in Real Estate for cashflow] While surfing onlne, I came across this blog post: Real Estate as an asset class. Basically this guy wants to be able to live off his dividends at some point and his blog is devoted to that. He's wondering how real estate fits in. He invests in REITS but isn't......
- What Are NINJA Loans? I was listening to the radio yesterday and I was listening to an investment show. The announcer was talking about mortgages and I heard him mention a NINJA loan. It stands for "No Income No Job or Asset" verification! If that isn't a liar loan I don't know what is.......
-
Real Estate: No Bottom Yet? John Mauldin is an investment adviser and president of Millennium Wave Investments. He sends out an interesting weekly newsletter, which most recently focusedon the current real estate market. It seems like the bottom isn't in sight yet: Analyst contend that much of the bad news in the subprime-loan and housing......
Related Websites
- Real Estate Investments - Good Idea or Bad Idea? Right now, if there was a market that had bad news written all over it, it would be real estate. The housing crisis has made investors jumpy, the economy appears to be tanking and home values are plummeting across the country. Would you believe that this is actually a good......
- Best Orlando Real Estate Thinking of buying or selling a home in Orlando? Orlando Real Estate professionals in Kissimmee, Celebration, Maitland, Lake Mary, Winter Park and other locations throughout Central Florida will assist you in buying or selling your house, condo, townhouse, or rental property. Browse Orlando Florida Magazine for the best in......
- The Coming Real Estate Crash? Foreclosures Up 79%. In California, that is. I am sure it not as high other places, but a 79% jump in foreclosures is a pretty big jump, wouldn't you say? According to Inside Bay Area, California had 16,273 foreclosure filings in February, up 79 percent from a year ago which does not bode......
[All content is copyright of Living Off Dividends & Passive Income]
Leave a Reply