Greg Cowart on Zillow
Greg Cowart - Mortgage Broker or Lender at The Securus Group
Greg Cowart - Roseville Loan Guy

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What was the cause of mortgage rates jumping up the last two days?

The Fed did not cut or increase any benchmark interest rate but rates jumped up a bit in the last two days. Anyone looking at the Fed Funds rate (or any rate set by the FOMC) or the 10 year Treasury for guidance on mortgage rates is uninformed. The Mortgage Backed Securities (MBS) market is the only place that is directly influential on mortgage rates. The Fed Funds and Prime rate stayed the same yesterday but mortgage rates took a 0.25% hit at the same time. Not much of an indicator there. Then the 10 year note was hit hard yesterday, much harder than Mortgage Backed Securities (MBS), so much so it wasn’t even close… Can’t really rely on that either.

While the MBS market takes cues from places like FOMC announcements, treasury bond trading, and the equities market, they are not the indicators a professional loan consultant should be looking at when advising his/her clients if they should lock or float the rate on their loan. Comstock Mortgage in Sacramento and Roseville has made it a point to become experts in tracking the MBS market as just another service to making sure our clients get the best loans possible. Always remember that whoever you choose to work with make sure they are full time, experienced, professionals and before taking advice try and quiz them on what makes the market move. If they say things like the Prime rate or the 10 year Treasury bond think twice before trusting their expertise with what is the most important financial decision most Americans make in their lives! A home loan or mortgage…

~Greg – The Roseville Loan Expert

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