Hi {first_name},

I'm back with some more educational content to help you make the best decision when seeking financing for a home loan.

Two weeks ago I talked about what happens when you don't use an independent loan originator versus going straight to the banks to acquire a home loan.

Today we're going to discuss why mortgage rates are constantly changing.

Why Are Mortgage Rates Constantly Changing?

Almost all mortgages are sold on the secondary market — which is the primary function of Fannie Mae and Freddie Mac. They not originate or provide mortgages to borrowers. They purchase and guarantee them via the secondary mortgage market.

Once a lender has funded your loan (given you the money), they will most likely sell it to the investor for cash at a small profit. That loan will then be bundled with thousands of other loans into a bond called a Mortgage Backed Security (MBS), which is bought and sold by investors just like other bonds and stocks.

The price of these securities fluctuate daily based on market activity, so when the price of the MBS goes up, the lender will get more for the loan if they sell that day. Which is a good thing because that means they can give you the money at a better price. The market for MBS typically fluctuates about .25% from one day to the next.

If the MBS price went up .25% (25 cents per $100 of bond value), the lenders would improve the pricing on their loans by that amount, which would show up in the form of a larger credit to the borrower for the interest rate chosen. So an improvement of .25% in the bond market would mean that a $300,000 loan would be $750 less expensive, if the borrower chose to lock in the rate at that time.

{first_name}, I know some of this can be a little confusing, but that's what I'm here for ... to be your mortgage consultant and real estate advisor.

Now is a great time to get approved for a home loan and get an extremely affordable low interest rate. Whether you're a first-time home buyer, looking to buy a second home, refinance your existing loan or find the home of your dreams has the knowledge and years of experience to provide you with a loan that fits your exact needs.

If you have any questions or would like to speak to me personally please don't hesitate to reach out.

Sincerely,