Arizona Mortgage Rates
Current Arizona Mortgage Rates are at all
time lows! This reminded me of a dinner
recently with two friends of mine who are also
real estate agents. One of the agents brought
along a friend who is a mortgage broker at a
different company. The topic turned to rising
interest rates. The broker said, "Mortgage
rates will stay flat until after the election.
(Federal Reserve Chief Alan) Greenspan won't
mess around with (George W.) Bush."
Very interesting comment. Especially from
someone in the mortgage business. Is he right??
Well, yes and no. As we have seen in the last
few weeks, mostly no.
This comment made me think. "Do you know
what makes mortgage interest rates rise?"
I want you to take a moment to answer this
question yourself before you read below. What
do you think makes rates go up? As
professionals in this business, this is
something we should all know, yet not of us
many do. I work with agents who have been in
the business for over 20 years who cannot
answer this question properly. I have worked
with many loan officers who also cannot answer
this question.
Arizona Mortgage Rates
"What makes actual mortgage interest rates
rise?" Is it the Fed? The economy? Inflation?
The banks? The President? Fannie Mae or Freddie
Mac?
If you are a regular reader of this
newsletter, you know that I try to make it as
easy as possible to understand. I dont want
this to become a boring Economics 101 lecture
but I think it is important for you to
understand the basics so that you can
communicate with your clients when they
ask.
First it helps to understand that there are
many different types of mortgage interest
rates.
There are Prime, T-bills, Treasury Notes,
Treasury Bonds, Federal Funds Rate, Federal
Discount Rate, Libor, 6-month CD rate, COFI,
Fannie Mae Backed Security, and more. Although
I am probably missing one or two, each of these
can be tied to your loan and each of these can
rise and fall at different levels.
Actual mortgage interest-rate movements are
based on the simple concept of supply and
demand.
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