Apr 16

Interest Rates Remain Steady

The mortgage bond market opened up this morning and has remained on the plus side all day, a good sign for long-term mortgage rates.  Interest rates do the opposite of the price of bonds, if bonds go up, rates go down. So the price on interest rates improved slightly this morning.  That sounds funny doesn’t it? The price of interest rates, most people don’t think of it as buying money. 

The driving force seems to be the mess in Europe.

How much lower can rates go?

Not very much, there are fixed costs just to bring the money to the table.  The stock broker that sells the bonds must be paid, the investor that buys the bonds wants some return, the company that originates the mortgage needs a little to keep the lights on, the servicer that collects the payments and pays the bills gets a little bit.  Seems like I am missing something, oh yeah, the loan officer! 
Choose your own numbers assigned to all of that stuff and it becomes clear, they can’t go much lower. 

Rates are here.

Online Loan Application is here.

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