Wednesday, August 7, 2013

Why Interest Rates Change

We are constantly being asked if interest rates are going to go up or down.  Our answer is always the same: we don't have any idea.  Here's why we don't know.

Mortgage interest rates go up and down depending on how the mortgage bond market is trading.  If investors (China, Japan, the Federal Reserve, etc.) buy a lot of mortgage bonds, then rates will be low.  If those same investors decide to buy fewer mortgage bonds, then rates will go up.

NO ONE knows how big the demand for mortgage bonds is going to be every day.  Some days it's pretty big, and some days it's not so big. 

We call Beijing, Tokyo, and Ben Bernanke every morning, to find out how many bonds they are going to buy that day, but we always have to leave a message and they never return our calls.

So we don't know if rates are going to go up or down.

Plenty of lenders will tell you that they know whether rates are going to go up or down, but they are just making it up so you will think they know what they are doing.  It's a lot like flipping a coin - you're going to be right exactly 50% of the time.

We have always found that saying "I don't know" is one of the best things you can do to increase your business.  We say that every time someone asks us about interest rates changing, and we're right 100% of the time.  People really like that.

Call us if you want to use the best and most knowledgable lenders in Colorado.  We can tell you the answer to anything you want to know about mortgages, except for whether interest rates are going up or down! 

 
Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!  


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By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

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