4 Questions Your Lender Should Answer About Mortgage Rates

By Sal Zangari: Personal Mortgage Specialist

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.

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.

What causes mortgage rates to change?

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

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

Thank you

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