mortgage rates: Summer 2019 Guide to Mortgage Rates - 06/03/19 09:20 AM
 
Mortgage rates are determined by the supply and demand for mortgage bonds in the bond market.
Why Mortgage Bonds? When you get a mortgage in the US, your mortgage company is getting the money from Fannie Mae, Freddie Mac or other "securitizers". These "securitizers" get their money by issuing bonds to bond market investors.  These bonds are called "mortgage bonds" or "mortgage-backed securities".  Therefore, the mortgage rate you pay is really determined by the supply and demand for mortgage bonds in the bond market.

The Role of the Federal Reserve As you can see from the chart, the Fed owned … (1 comments)

mortgage rates: How to Understand Annual Percentage Rate (APR) on Your Mortgage Loan - 12/26/18 07:32 AM
  The federal government requires mortgage lenders to disclose the "annual percentage rate" (APR) whenever they advertise a loan program. But what is APR, and does it really matter to you? Here's the thing: APR lumps all your "finance charges" into your interest rate. As you can see from the list below, some of your closing costs are considered "finance charges."  APR is calculated by adding all these finance charges to the total interest that you'll pay over the life of the mortgage. An annual interest rate is then calculated based on that total number.
APR Closing Costs & Prepaid Items … (1 comments)

mortgage rates: How the Fed Impacts Mortgage Rates - 12/17/18 09:36 AM
 
The Federal Reserve Open Market Committee (FOMC) meets at least eight times per year to discuss and vote on US monetary policy. The Fed controls the Fed Funds rate, which is essentially a bank's cost of money. When the Fed increases the Fed Funds rate, short-term interest rates such as the Prime rate and LIBOR go up. These are often used to determine interest rates on adjustable rate mortgages, home equity lines of credit, credit card balances, and business loans.
However, interest rates on fixed-rate mortgages are not tied to changes in the Fed Funds rate.  Mortgage rates are determined by the supply and demand for mortgage bonds in … (2 comments)