Like many industries, housing finance has a superficial layer that’s fairly easy to understand for the average consumer. A person wants a home. They don’t want to pay cash. They get a loan. Lower rates = lower payments. The end. Shortly below that superficial layer of understanding, where a surprisingly high percentage of mortgage professionals operate, it’s popular to discuss 10yr Treasury yields as a basis for mortgage rates. The only problem with viewing 10yr yields as the basis for mortgage rates is that they’re not. Anyone can observe this objective fact by jumping just a bit deeper into the rabbit hole and acquainting themselves with MBS (mortgage-backed securities). These are the true raw ingredients for mortgage rates even though they frequently mimic 10yr Treasury yield movement. By

2020-12-01 16:40:47

Source link

Courtesy of Mortgage News Daily

Leave a Reply