MBS: What REALLY Determines Your Mortgage Rates

Mortgage rates today, November 24, plus lock recommendations November 15, 2010 Robert McLister Reply. Hi Paul, Thanks for the note. It’s always tough to make recommendations without borrower details, so I won’t. But I can say that based on the Big 5’s rate projections (1.75% prime rate increase by Dec. 2012), the 5-year is compelling-even versus Prime-0.85 and even with your extra payments factored in.

A mortgage-backed security (MBS) is a type of asset-backed security that is secured by a mortgage or collection of mortgages. This security must also be grouped in one of the top two ratings as.

The current movement doesn’t really. mortgage rates. All things considered, it actually has been a remarkably gentle drift lower. Things became less gentle in mid October when rates briefly broke.

MBS: What *really* determines your mortgage rate If you sell your bond for just $800, the buyer gets that same $50 a year in interest. But, having paid just $800, he will get more interest income. Your mortgage’s interest rate is set by market forces beyond the lender’s control.

Fannie Mae’s fixed-rate MBS are securities backed by pools of mortgages with interest rates that are fixed for the entire term of the mortgage. Certificates for fixed-rate MBS are normally issued in 50 basis point increments (e.g. 4.0%, 4.5%, 5.0%, etc.).

Mortgage Backed Securities is the practice of combining a whole lot of. In the past large investors had to work very hard in order to be involved in the residential real estate market.. What determines mortgage rates?

What really determines mortgage interest rates? Stephen Boyd, Sr. Mortgage Consultant When asking what drives mortgage interest rates and what are they based on, the correct answer is Mortgage Backed Securities (MBS’s) or Mortgage Bonds, NOT the 10-year Treasury Note as many people believe.

It’s Just Math: MBS Prices And Mortgage Rates. The price an investor pays for an MBS determines its yield. "Yield" refers to the relationship between the MBS price and interest paid. If an MBS has a price of $100 and a 4.0 percent coupon rate, its yield is also 4.0 percent. $4 / $100 = .04 or 4.0 percent.

Today’s mortgage rates: review current rates below. For more information on loan types and to determine which interest rate you qualify for, contact a mortgage consultant at 888.457.5626. For more information on loan types and to determine which interest rate you qualify for, contact a mortgage consultant at 888.457.5626.

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Mortgage Backed Securities Market | MBS Trading | MBS Rate. – So you purchased the security at a discount to make up for the lower coupon rate on the security. This is exactly why discount points are charged on lower rate mortgage loans – to make up for the lower return. As the price goes down, the yield increases. This is the mechanism through which price changes for MBS determine mortgage rates.

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