|
A: Why use a Connecticut Mortgage Broker?
Connecticut Mortgage brokers.
Apply for a Connecticut Home Equity Loan
Apply for a Connecticut Home Mortgage Loan
Contact Us
First Time Buyer in Connecticut Seminar Sign Up
Get Pre-Approved or Pre-Qualified
Refinance your Connecticut Home Mortgage Loan
|
1. What Can You Afford >>
Quick Guide through the CT Mortgage Puzzle >>
CH5
Another way the Fed controls money is to increase the amount of money banks are required to have in reserve - also known as the reserve requirement. 15
When the amount of reserve is increased, Connecticut mortgage loan interest rates tend to increase.
When the amount of reserve is decreased, Connecticut mortgage loan interest rates tend to decrease.
I can guarantee that if the Fed is talking about lowering their rates you will have many clients calling you expecting lower Connecticut mortgage loan interest rates. Let me tell you that when the Fed lowers their rates it doesn't always translate to lower Connecticut home mortgage loan rates.
Here are some facts to keep in mind when talking to your clients: 18
The Fed can only raise or lower the Fed Funds Rate and the Discount Rate not the Connecticut home mortgage loan rates.
Connecticut home mortgage loan rates are based on mortgage-backed bonds known as Mortgage Backed Securities (MBS).The trading performances of bonds issued by Fannie Mae and Freddie Mac will determine the direction of Connecticut home mortgage loan rates. 20
TREASURY BONDS
Mortgages are long term debts that also use 21 the Treasury bond market as a benchmark for determining Connecticut mortgage loan interest rates. The Fed's policies also affect the price of Treasury bonds. There are, however, many other factors that can affect 22 the bond market. Rumor, speculation, stock market activity and fears of inflation are among the strongest influences.
Here is a simple formula to give you a better idea of 23 what is happening in the bond market every day. Think of a seesaw. When the Treasury bond market rallies and bond prices move higher based on weak economic news, Connecticut mortgage loan interest rates will usually go 24 down. Conversely, when the bond market prices go lower, Connecticut mortgage loan interest rates will usually rise.
In all my years of doing mortgages, it took my family a 25 long time to figure out why I was always excited when there was bad economic news. Economic analysts and news reporters would be predicting gloom and I was cheering because lower Connecticut mortgage loan interest rates were usually on the horizon.
A Treasury bill is issued for less than a year. A Treasury bond is issued for more than 10 years. A Treasury certificate is issued from 5 to 10 years and a 27 Treasury note is issued from 1 to 5 years.
THE STOCK MARKET
The stock market also has a strong affect on Connecticut home mortgage loan rates. When the stock market is doing well, consumer confidence soars. One result is a 28 higher demand for housing and new mortgages. When the stock market is performing poorly, people tend to lose their confidence in the economy. This tends to lead to fewer homes purchased. 29 When this happens, lenders tend to lower their Connecticut mortgage loan interest rates, trying to generate business.
The stock market also affects how investors who purchase mortgages react. If the market is doing well, investors tend to invest in stocks and 30 not in bonds and mortgages thus reducing the money available to fund mortgages. To attract investors, lenders will raise Connecticut mortgage loan
|