Real estate blog entries tagged with fed rate cut by Robert Smith (Byron Bank)

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Home : Blogs : Robert Smith : Robert Smith's Blog : Tag "fed rate cut"

fed rate cut: What are fixed mortgage rates based on? - 11/01/07 12:15 PM

Many loan officers dont even know the answer to this one. Fixed rate 1st lien mortgages are based on Mortgage Backed Securities, or Mortgage Bonds. They have nothing to do with the prime rate, or the 10 year T-bill (even though many loan officers continue to think that they do!) Also, I always get many callls on the day that the Fed lowers the discount rate. (I took a call while typing this!) People are often surprised as to why mortgage rates havent fallen as well. The reason is that by making a rate cut, they have made obtaining money cheaper and have … (3 comments)

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Robert Smith

Grand Rapids, MI

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Byron Bank

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