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Mortgage
Rates
There are various
factors which determine the mortgage rates but the common people
generally have no idea about it.They are of the opinion that it is
the lender who decides the rates and are responsible for the high and
low mortgage rates.Frankly speaking the real drivers of the mortgage
rates are the shareholders of the secondary market.The present
mortgage rates fluctuates without any justification.The mortgage
rates have their own driving force.
The one who lends
the money for a mortgage is referred to as an originator.The
originators are
Banks
Credit unions
Mortgage
companies
Mortgage
brokers
Financial
companies
The money flow
originates from the mortgage lender to you and finally to the seller
of your dream house.After the mortgage is funded it is in the hands
of the originator to decide whether to sell it to the secondary
market or to keep it in its portfolio.If it is kept in his portfolio
he will earn through the interest being paid monthly.But if it is
sold in the secondary market he will be able to mortgage new buyers
through the fund he has obtained.Ultimately the secondary market
brokers keep the funds on rotation so that the originator gets money
for new mortgages.
Secondary
market investors
You might be
wondering who these secondary market investors are? They are
These are
liquidating investments which can be easily bought and sold.The
government chartered companies buy these mortgages and put them for
resale or sometimes even group these mortgages for resale which is
referred to as mortgage-backed securities.
On conclusion it is
better to lock the rate when the rates are low.Make your planning
based on your financial situations and opt for low mortgage
rates.This will enable you to enjoy a lot of benefits. |
