federal reserve: Rates are going down, what does this mean to your mortgage?
- 03/19/08 03:16 AM
This means that rates are potentially going up, since the feds funds rate which was just cut, mainly applies to corporations on the bank investor. The ten-year treasury note is tied in directly to the bond investor,(not the fed funds rate as is commonly thought) and that is what causes mortgage rates to go down. The catch is that if interest rates go down then bond investors will demand a higher return, thus causing interest rates to go up for mortgages. In addition, many banks or mortgage lenders are charging fees to help them make profits, which causes the mortgage payment to … (1 comments)
This means that rates are potentially going up, since the feds funds rate which was just cut, mainly applies to corporations on the bank investor. The ten-year treasury note is tied in directly to the bond investor,(not the fed funds rate as is commonly thought) and that is what causes mortgage rates to go down. The catch is that if interest rates go down then bond investors will demand a higher return, thus causing interest rates to go up for mortgages. In addition, many banks or mortgage lenders are charging fees to help them make profits, which causes the mortgage payment to … (1 comments)
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