www.bestsyndication.com Have you ever wondered why banks continually change mortgage interest rates? There are many factors that help lenders determine both fixed rate and ARM mortgages. This video will explain how the interest rate is determined. There are many factors that affect mortgage rates including government bonds, rates that the government sponsored enterprise charge and the London Interbank Offered Rate. In this information program, we will discuss how these benchmarks are used to help bankers determine mortgage rates. One common benchmark cited for determining mortgage rates is the Federal Funds rate. This is the rate that banks charge other banks for overnight operations. That rate is currently in a range between zero and 0.25 percent. The discount rate is the Federal Reserve's primary interest rate. This is the rate that the Federal Reserve, also known as our central bank, charges member banks. Unlike the Federal Funds rate, the Federal Reserve Bank has absolute power in determining this interest rate. The current primary rate for the member banks is 0.75 percent. Banks that are not eligible for this primary rate are charged 1.25 percent. A third seasonal rate is for small depository institutions that need to meet seasonal requirements. The Prime Rate is what banks charge their best customers, usually corporations and large companies. This rate is typically 2.5 to 3 percent above the Federal Funds rate. These rates rarely change, so why do mortgage rates ...
mortgage-investment.blogspot.com How Do Banks Determine Mortgage Interest Rates?
While it is impossible to be 100% accurate, I do think there is some good information to work with and predict mortgage rates for the rest of 2009. Here are my mortgage rate predictions for the remainder of 2009, a few months into 2010, and how I made them.
Most people who own homes know that even a little bit difference in the interest rate percentage, can mean a big difference in payments, and the total cost of owning the home. Earlier this year, mortgage rates were at historic record lows of around 4.69% for a typical 30 year fixed rate mortgage. That rate stayed the same until about 2 months ago when it increased by about .5% to 5.19%. This rate increase was expected by me, and was due to the large demand from homeowners for refinancing and home loan modification. This demand was brought on by the low rates, the high number of people in bad mortgages, and the Obama housing plan.
The combination of these 3 things led to a huge amount of paperwork from homeowners looking to refinance or get a home loan modification, and led to a large amount of work. As a response to slow the applications, the mortgage lenders and banks raised rates a little. These rate increases were small enough to still help a lot of homeowners, but were enough to hold off a lot of other homeowners just looking to get a better interest rate.My Mortgage Rate Predictions for 2009:
I think for that home interest rates will drop again later this year. I predict that mortgage rates of 4.69% for a 30 year home mortgage will be here once again. I think that this will happen sometime around October and will last until April of 2010.
The rates will be lowered because the mortgage lenders and banks will be ready by then to take on a new crop of customer applications. This means that homeowners who can wait, stand a better chance of getting a better deal on their refinancing or home loan modification. Suggest Mortgage Interest Rate Predictions Issues
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