Mortgage interest rates are based on a number of things but are very specific to the particular transaction at hand, meaning that not all borrower’s are going to get the same rate. A borrower’s credit score, how much money they are putting down, whether they are doing a conventional mortgage or a government program (i.e. FHA or VA) and property type are the major factors that determine a borrower’s interest rate. Interest rates in general are based on activity within the mortgage backed securities market. Most people are familiar with the stock market and therefore watch the Dow Jones Industrial to determine whether the stock market is doing well or not. The Mortgage backed securities market works differently. The recent volatility, especially in the stock market has benefited mortgage backed securities in general since when the stock market is suffering, investors jump out of the stock market and seek the safe haven of bonds (mortgage backed securities). As the markets change daily so do interest rates.
If you have additional questions about mortgage interest rates please contact us today!
