When choosing a lender, you should make sure your lender is able to answer a few basic questions. Sal Zangari includes these questions here. SalZangari.net
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4 Questions Your Lender Should Answer about Mortgage Rates
1. 4 Questions Your Lender
Should Answer
About Mortgage
Rates
By Sal Zangari: Personal Mortgage Specialist
2. Who determines mortgage
rates and what are they tied to?
Mortgage Rates are determined by the pricing of
Mortgage Backed Securities or Mortgage Bonds.
The media tends to imply that the rates are based
off the 10 year Treasury Note, which is not true. It
has been known to trend in the same direction but
they can also move in opposite directions.
3. How often do mortgage rates
change?
Mortgage rates may change throughout the day
but only on the days when the Bond markets are
trading securities.
A Mortgage Bond’s sales price is similar to a
Stock which trades up and down throughout the
day.
5. Mortgage Bonds are affected by many different market
forces that influence the changing demand for bonds within
the market including:
• unemployment percentages
• inflationary fears
• economic strength
• overall movement of money
• consumer and investor emotions
6. What do you use to monitor
mortgage rates?
There are a few subscription based services
available to monitor Mortgage Bond pricing.
The key is to make sure the lender is aware they
should be monitoring Mortgage Bond pricing