Mortgage Rates – What Drives Them?

admin — Sat, 05 Jun 2010 18:16:33 +0000

The question I get asked the most in regards to Massachusetts Mortgage Rates, is what drives them. My clients are amazed that it is not the fed. When the Fed makes a move, they can change a rate called the “Fed Funds Rate” or “Discount Rate”. These are both very short- term rates that impact credit cards, Home Equity credit lines, auto loans and the like. On the day the Fed move, Mortgage rates most often will actually move in the opposite direction as the Fed changes. This is due to the dynamics within the financial markets in response to inflation.

Massachusetts Mortgage rated are actually driven by Bonds, when the market is buying bonds they are helping drive the 30 year mortgage lower. It’s a double edge sword for many people; they want the stock market to due well, but they want interest rates to drop. However, most of the time when thee Dow is going up so are interest rates. And when it is going down interest rates improve.

So the next time you are looking for mortgage in Massachusetts make sure your mortgage person actually knows what drives rates, and how it all works. If they cannot explain how Mortgage Bonds and interest rates are moving in real time and warn you in advance of a costly intra-day price change, you are talking with someone who is still reading yesterday’s newspaper, and probably not a professional with whom to entrust your home mortgage financing. Would you work with a stockbroker who is only able to grab yesterday’s paper to tell you how a stock traded yesterday, but had no idea what the movement looks like at the present time and what market conditions could cause changes in the near future?

By: Christopher Hills

Home Equity and Second Mortgage Loan Options for Cash or Debt Refinancing

admin — Sun, 13 Dec 2009 01:39:36 +0000

If you are a consumer who owns a home, then you might be tired of getting mortgage solicitations to refinance your mortgage. Most likely, you are a savvy homeowner who locked into a 30-year mortgage a few years at 5% with a fixed interest rate loan. You may be wondering why these mortgage lenders and brokers think you would be interested in refinancing your 5% loan with a 6.5% mortgage rate. Mortgage companies are blasting direct mail campaigns that are targeting many homeowners in Southern California. You may not need to refinance your 1st mortgage, but chances are, you will want to access cash in the coming months. A fixed rate second mortgage or variable home equity credit line can get you cash, and a tax deduction without requiring you to refinance you low interest mortgage.

Second mortgage are effective financing vehicles for funding home construction, purchasing a second home or refinancing variable rate credit card debt. Home equity lines of credit are convenient, for people with changing plans. HELOC’s can improve cash flow because only the interest is due on the portion of the line that you actually accessed. This offers a financing arsenal for borrowers needing cash on a whim for investing, and purchasing rental properties. A homeowner armed with a home equity line of credit protects their family with a safety net of cash reserves in case a emergency or tragedy arises.

I recommend to all of my clients to establish a home equity credit line whether they think they need it or not. If they never use the credit line, then it never costs them a penny. There are no crystal balls in the world, so you have to plan for both opportunities, and financial hardships. Get a second mortgage or line of credit, while your credit scores are high. Why wait until you are late on a bill and your credit scores are low. Take the small window of opportunity, and get your finance vehicles tuned up, because when you wake up tomorrow the opportunity may have already passed.

By: Lynda Nelms

Mortgage second » 30 Year Mortgage

Mortgage Rates – What Drives Them?

Home Equity and Second Mortgage Loan Options for Cash or Debt Refinancing