Mortgage rates are a fickle thing. One day they are up, the next they are down, and this causes them to be misunderstood by many consumers. Many consumers see mortgages and mortgage rates as an uncontrollable and mystifying thing. As such, they believe that there is nothing they can do about it, but this is a misconception. Mortgage rates and the reasons they are constantly fluctuating really are not that hard of concepts to grasp, and Check City as a Financial Industry Leader would like to offer you our help when it comes to understanding and making the most of your mortgage.
-
The mortgage lender that funds your loan (Check City) is called the originator.
-
When you receive the loan, it goes to the seller of the home you are purchasing.
-
When the loan is funded, the originator has two options, they can either resell that mortgage into the secondary market or keep it in their portfolio to gain interest.
-
If the loan is sold then the lender has money to make a loan to other customers.
-
If they keep the loan, they will receive interest, (by way of your monthly payments).
-
-
The secondary market keeps money circulating so that lenders can afford to continue to lend.
-
Secondary market companies include names such as Fannie Mae and Freddie Mac as well as insurance companies and others.
-
-
Now,depending on the economy,investors will either hold these accounts or sell them. If the yield is supposed to be higher in the coming months, investors will sit on the mortgage until that better rate comes around. This causes interest rates to be higher, because these mortgages are not being bought and sold as readily and lenders cannot sell their loans to these investors. When the economy is the other way around, investors will sell as much as they can to avoid being left with lower yields and therefore interest rates will drop because lenders have an easier time of selling their mortgages to the investors.
-
As a home buyer, understanding the rates, including how and why they change will help you to know when to lock in your rate. When the economy is low or on a downturn, lock in that rate, and your interest rates will be a lot lower, and you will be able to save a bundle of money.
Hopefully that helped to demystify mortgage rates a little bit for you. Still, you need a great Mortgage Lender that is experienced in the financial industry and can help you get the best mortgage rates possible. Check City is standing ready to help you out. We offer great deals on our Mortgage Services* and with our experienced and friendly staff you can get the help you need in a quick and professional manner. Visit one of our Check City Utah Locations to start saving today.
