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Health & Fitness

Why Do Mortgage Rates Go Up & Down?

Sooner or later, every new client asks: So what are your interest rates?
My simple answer is: Mortgage rates are subject to change on a daily basis and can change again at any time during the day depending on changes in market conditions. Any rate quoted today may or may not be what can be offered at the time of application.
So: What Market Conditions Make Mortgage Rates Go Up and Down?
The Stock Market   This is the easiest benchmark to follow. In general ... When the stock market indexes go down, mortgage rates typically go down. When the market goes up, rates go up.
Economic Data   Mortgage Rates reflect the relative strength or weakness of the overall economy on a daily basis. Good news for the economy is often bad news for mortgage interest rates.
Inflationary Pressure   Low interest rates depend on low inflation. The prospect of higher demand for consumer goods and better job prospects signals high inflation and leads to higher rates.
The Federal Reserve   By controlling the flow of cash through the economy, the Fed attempts to keep inflation under control. More money in the economy translates to lower borrowing costs, and vice verse.
Geo-Politics   Investors turn to the U.S. markets a “safe haven” when things go wrong in their part of the world. Crisis in the Ukraine, tension in the Mid-East push rates up.
The Weather   I'm not kidding. What’s bad for the world is good for mortgage rates. Tsunamis in Japan, earthquakes in South America attract investors to our markets for safety. This flood of money puts upward pressure on bond prices and push mortgage rates down. A serene weather picture around the world could push rates up.    

Now I’m just a small mortgage broker doing what’s right for my clients. I’m not an economist, nor do I have a crystal ball that enables me to tell anyone where mortgage rates are heading in 2014. But I have been challenged by senior bank executives across this country to look at the big picture when making small decisions that affect peoples’ lives. As my testimonials will confirm, all I can promise is that I will do my best to provide clients with the Right Mortgage at the Right Rate for their family situation.

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