Mortgage Insight with Mike Shaw

Did You Know All Mortgage Rates are Always Available?

March 17th, 2018 3:25 PM by Michael Shaw

Mortgage Rate Market

Did you know all banks and lenders get mortgage rates from same place? Yes it’s called the Bond Market.  And this may blow your mind: Rates don't change, it's the cost of each rate that changes based on the bond market. Essentially mortgages are grouped together into a mortgage bond so they can be sold and traded, otherwise banks and lenders would run out of their own money to lend quickly. Each mortgage bond has an interest rate ranging from roughly 2.5 up to 8%. This is the range of rates you can always get! 

So it's the price of each "mortgage rate bond" that changes based on free market trading and the current economic conditions. That price is then passed on to you and it is always changing. Think of it like this. If you could invest in a 30 yr mortgage bond would you rather get a higher rate of return like 4.5% or lower like 3.25%? 4.5% of course! But 8 years ago when the economy had tanked 3.25% was a great deal! Investors want a decent fixed rate they can count on compared to riskier stock investments. Today 4.375% is an average good rate but they pay extra for a higher 4.75% rate. That extra money is passed on to you and is what helps pay for your closing costs on a No Cost Loan. Rates like 3.75% are too low for investors so they won't pay much for a low return like that. You the borrower have the option to make up the difference, which is why 3.75% costs a few extra points now!

You can still get 3.25% but it's just too darn expensive to talk about. The going rate is now in the low 4's and rates higher than average are where you end up with the No Closing Cost loan and rates lower than about 4.375 you pay extra. We use professional software to analyze all of the rates, costs, and loan programs to see which ones provide you the best financial benefit! 

Can't you get a better deal at your bank or credit union? Since the rates come from the bond market, everyone has to add on their overhead and profit. Mortgage Brokers like The Mortgage Advisors LLC just have lower overheard and mark up the cost much less on average!

We can find the True Break Even Point ™ on your purchase or refinance to make sure you are making a wise mortgage investment! Let us know if we can help!

The Mortgage Advisors | Empowering YOU with Educated Mortgage Decisions!

Michael Shaw   Sr. Mortgage Advisor, Owner  Phone/Text: 303.979.1822

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Posted by Michael Shaw on March 17th, 2018 3:25 PM