loans: It's not the Fed that keeps long term interest rates low
- 10/18/07 01:02 AM
It's become common for the public to watch the actions of the Federal Reserve, thinking that their raising and lower of interest rates will have some affect on home mortgage rates. The truth is that what the Fed does has very little impact on interest rates for most home mortgages. To understand what drives long-term mortgage interest rates you must understand where the money for home mortgages originates. Home mortgage money comes primarily from investors. Once a mortgage is made to a homeowner it is sold on the "secondary" market and packaged with other mortgages becoming a "mortgage-backed security." This security is … (0 comments)
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It's become common for the public to watch the actions of the Federal Reserve, thinking that their raising and lower of interest rates will have some affect on home mortgage rates. 
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