How Mortgage Interest Rates Are Set May 3, 2008
Posted by GregChaffin in : Financing, Real Estate , trackback
Mortgage interest rates are not set by the Federal Reserve, nor are they set by the yields of US Treasury bills, bonds or notes. Despite what you hear in the Media, mortgage interest rates are actually set by lending institutions and are based solely on mortgage backed securities.
For many years, the media and inexperienced loan officers everywhere have suggested that the 10 year Treasury Note, a government backed security is directly tied to mortgage interest rates, that the two are separated by a specific interval – which is simply not true. The Federal Reserve cut interest rate 6 times from September 07 thru March 08, yet mortgage interest rates actually rose during that time frame.
Stop being misled, if someone you know is thinking about purchasing a new home, or refinancing their existing one, give me a call. I’ll give you the facts you need to make a truly informed decision.
Greg Chaffin
Mortgage Advisor
(432) 528-3192 - Cell
greg.chaffin@mortgagefamily.com
Financing, Real Estate
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