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Mortgages 101, 3rd Edition by David Reed

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CHAPTER 13

Finding the Best Interest Rate

Ah, the Holy Grail. After getting all your finances together, finding a home, finding a loan program, finding a lender, and finding a loan officer, it all boils down to this, doesn’t it? Knowing how rates are set, how they can move, and when they move can help you nail down a rock-bottom rate.

13.1 WHO SETS MORTGAGE RATES?

Lenders set interest rates every business morning as markets open. There are various indexes, but for fixed-rate mortgages they’re set to a mortgage bond and priced accordingly. A 30-year fixed-rate price will be tied to the current 30-year Fannie Mae coupon being traded that day. If ...

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