1. |
What are mortgage rates based on? The answer is mortgage backed securities or mortgage bonds. The answer is NOT the 10-year treasury. The treasury rate often works in opposite directions and is not the best indicator of rates. DO NOT work with a lender who has their eyes on the wrong indicator. |
2. |
What is the next economic report or event that could cause a move in interest rates? This is information that a professional, well informed lender will have at their fingertips. Do not work with a lender who cannot provide this information. |
3. |
When the Federal Reserve change rates, what impact does this have on mortgage interest rates? When the Fed moves rates, they often move the Fed Funds Rate or the Discount Rate. These are very short term rates that impact credit card debt and home equity credit lines. These often do not impact long term mortgage debt which is more tied into the financial markets reaction to inflation. Your loan officer should be able to discuss this with you in much greater detail. |
4. |
Does your lender have access to live real time mortgage bond quotes? Mortgage interest rates offered change on a daily basis. A loan officer should be able to tell you how mortgage bond rates are moving and warn you of costly intra-day price changes. If your lender cannot provide this, then it is just like working with a stockbroker who quotes you rates from yesterday's newspaper. You probably would not want to work with someone like that. |
