Long term mortgages and the rates and terms they carry are determined by a couple of different factors.

While many people mistakenly think the Fed's control mortgage rates they are in fact determined by Mortgage-backed securities (M.B.S.).

M.B.S.'s are created by pooling loans and selling bonds with coupons based on the mortgage rates. 60% of the mortgage bonds in the U.S. are guaranteed by Fannie Mae, Freddie Mac, or Ginnie Mae. We've all heard of them before - right?

Yields, or rates on 10-year Treasury securities are typically used to track long term mortgage rates. Investors typically use Treasury yields as a benchmark for value, but it's the M.B.S.'s that create the actual interest rates. Factors such as supply and demand are always important.

When we talk about these large pools of money, we're talking about really large pools.
(imagine Trillions of Dollars).
Large pools of anything tend to move slow and steady.

Fannie, Freddie and Ginnie are not the only players in the 30 yr. fixed game.
There are significantly smaller "puddles" of money that need to be diversified and invested in real estate.
(now imagine just Billions or Millions)

These "puddles" may be controlled by large insurance companies, investment funds, pension funds and so on.

Every now and then one of these companies has a "puddle" they desperately need to have invested.

Rule Number One of "Pools & Puddles" is...
Like water, always keep the money moving - stagnant money earns nothing.
This applies to big business and small.



Two months ago, I was approached by a representative who had a "Puddle".
He needed to move this "puddle".
To entice the rapid deployment of this "puddle" they reduced the rate.
Once again, supply and demand.

Now since they didn't want to compete head to head with F & F, that would be bad business.
They went outside of F & F's sandbox. They went "Jumbo".
(a Jumbo loan is anything above the limits of F & F, currently $417,000)

Surprisingly, the rate at which this "puddle" was offered was a full 1% lower than other Jumbo rates and even below F & F rates! -

Wow!

I told everyone of my prior clients.
Needless to say, that "puddle" dried up pretty quick. It's now gone.

I don't think I've ever seen this before in my 14 years.
They have a new "puddle".

This one's just about the same.

• It's a 30 Yr. Fixed Jumbo.
• Fully lockable.
• No tricks, no gimmicks, simple stuff.
• Purchase or Refinance.
• Owner Occupied Only.

Yes, you don't have to have a Jumbo to use it, and there is an Interest Only option.

Hands down there may not be a better loan out there for the long term owner right now.
But is it right for you? Perhaps. Only by running the numbers can anyone really say.

Remember, it's a puddle not a Pool - Not available at you local bank - and it's first come first served.

There's only so much room in a Puddle - jump in while the Puddling is good.