Ask A Mortgage Banker: How Does The Federal Reserve Increasing Interest Rates Impact Mortgage Interest Rates?

    Ask A Mortgage Banker: How Does The Federal Reserve Increasing Interest Rates Impact Mortgage Interest Rates?

    Ask A Mortgage Banker, Home Buying

    April 18 2022

    I have been getting this question steadily all month, so let’s break it down.

    The fed funds rate is the prime interest rate and the rate the central banks charge each other for borrowing money overnight. This is done in an effort to try and hedge against/minimize inflation. Mortgage rates, however, are tied to the Fannie May 10 year bond, not the prime interest rate. The prime interest rate is what home equity lines of credit (usually prime rate plus a margin) and credit cards (usually prime rate plus a margin) are based on.

    Mortgage rates tend to take direction from some of these inflationary changes, as well as current political and monetary events both domestically and internationally. All of these various factors have different impacts and weights on the mortgage market. While the prime interest rate and mortgage interest rates do behave independently and are often correlated, they sometimes are inverse functions of each other.

    In addition to the above, all of the various reports such as GDP, Consumer Price Index, jobs report, etc, have different knee-jerk impacts on the market which is why rates are changing several times per day.

    If you have any further questions about this or the home buying process, feel free to give me call or send me a text at (760) 835-5663, I would be happy to speak with you!

    Ask A Mortgage Banker / September 13 2022

    Ask A Mortgage Banker: What Are 1031 Exchanges And How Do They Work?

    The 1031 Exchange is a provision in the IRS tax code. It allows investors to sell an investment property, buy another investment property and defer paying capital gains taxes on the sale. The 1031 Exchange is a provision in the IRS tax code. It allows investors to sell an investment property, buy another investment property […]

    Read More

    Featured Luxury Listing / September 12 2022

    Featured Luxury Listing: 57349 Merion, La Quinta, CA 92253

    57349 Merion, La Quinta, CA 92253 $3,000,000 8 Bedroom 9 Bathroom 6,779 Square Feet For more information, please contact: Angela Maciel Gibbons | (760) 880-8568 | [email protected] Click Here To View Full Listing   A cosmic combination of Santa Rosa Mountains, the lake & private Golf course views. Merion Estate is two homes in one […]

    Read More

    Franklin Loan Center NMLS #237653 Licensed by the Department of Financial Protection & Innovation under the California Residential Mortgage Lending Act, 4131316

    Copyright © 2022 Franklin. All Rights Reserved.