Interest Rates

Mortgage interest rates are based primarily on Mortgage Backed Securities (MBS).  Short version - MBS are fixed-income investments that generate interest revenue through pools of home loan mortgages. Mortgage loans are grouped together and sold to Fannie Mae, Freddie Mac, or other investors in the secondary mortgage market, who in turn securitize the loans. They are used as collateral for the bonds they issue.  Investors buy and sell these bonds. 

Generally speaking, if bonds sell low, mortgage interest rates rise. If bonds sell high, mortgage interest rates fall. There is a little more involved when it comes to interest rates, but that may be left for another day. Mortgage interest rates can change several times each day.  Loan officers, banks and brokers do not set mortgage rates. They set pricing, not rates. 

What am I really trying to say? Almost all lenders have access to the same rates! 

There are dozens of lenders to choose from. The mortgage market is very competitive. Although lenders may get their money from the same place, each lender may structure pricing differently due to various factors such as overhead and profit expectations. So, each bank may offer different rates and pricing even though they may have access to the same money other banks do.

Contact me today for a custom rate quote!