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Stock markets going down helps mortgage rates right?

by SiminHaik from Aliso Viejo, California. Mar 14th 2011 Reply


Patrick Bodine (pbodine)
#12 ranked lender in Minnesota - 25 contributions

Usually when the market drops it tends to push investors towards Mortgage Backed Securities (MBS) but not always.A lot of variables can effect mortgage rates such as foriegn market volatility and or national disasters which can influence investors in different directions.Your best bet is to find a mortgage profesional that monitors the whole market to advise you as to your options.Never be afraid to get a second opinion.Please dont hesitate to contact me if you have any further questions.BNC National Bank is a national lender with competative rates and fees.Patrick BodineSR.Mortgage Consultant 650 Douglas Drive NorthGolden Valley, MN 55422Cell:651.248.0467 Office:612.305.2284 Fax:612.766.9884 Email:pbodine@bncnationalbank.comWebsite:www.bncnationalbank.com/minneapolis/pbodine

Mar 14th 2011
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Crestico Funding (CresticoFunding)
#314 ranked lender in California - 337 contributions

Hello Simin,That used to be the case couple of years back, but in the past 24 to 36 months Stock Market and Treasury Bonds relation hasn't been predictable. Interest Rates depends on the coupon value and volume that is being traded by the investors. sometimes investors feel like purchasing stocks and bond at the same time which makes no sense but they have the ability to do it because they have the capital and they usually do it based on a specific strategy in mind to make more money. it is complicated than it sounds like. i have been a mortgage professional for 10 years and i used to advise my clients on locking their loans based on the market but in the past few months it's been very hard to read the market. if you need additional information please feel free to contact my office via email Houtan.Hormozian@Crestico.com or call 310-933-4748 for more information.

Mar 14th 2011
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Todd Tholl (toddtholl@leader1.com)
#4 ranked lender in Iowa - 239 contributions

In general, yes. When the stock market drops, investors are looking for a safer place to put their money. Mortgage backed securities (bonds) are one of these places. When the demand for these securites goes up, so does the price. When the price of increases, rates typically go down.

Mar 15th 2011
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Rich Constantine (rconstantine)
#396 ranked lender in California - 79 contributions

In a way yes and no. The best way to watch for mortgage rates is to follow the 10 year treasury yield on Money.cnn.com. When the 10 year goes down the rates tend to go down. The 10 year yield was @ 3.62% or about 5% 30 year fixed, right around when Egypt was fueding. Now it is at 3.36% and my rates are 4.75%. My name is Rich Constantine and you can email me @ rconstantine@myhsoa.com . Hope this helps. RC

Mar 14th 2011
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Dan Paladin (dpaladin)
#1 ranked lender in California - 587 contributions

In general yes....as money moves from one sector to the other, meaning treasuries...it can help improve mortgage rates. It is not a solid rule of thumb. You can also watch the 10 yr treasury as it move mortgage rates move...if this moves up so typically does mortgage rates. If it move down rates tend to improve. As of this post 10 yr is at 3.35....

Mar 14th 2011
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Chris Gummerson (cgummerson11)
#394 ranked lender in California - 648 contributions

There are so many variables to the market and housing rates. Rates were driven down, to help the cost of credit become more affordable and to get more money exhanging hands in the sluggish economy. Rates are still at almost historical lows. Although with the Tsunami and crisis in Japan, more money will need to be generated to help overseas, meaning increase in purchase of tbills and a rise in interest rates. If you are looking to purchase, do it soon. If you are looking to refinance, take a big look at your current situation and if new loan would benefit you. Hope this helped a little.

Mar 14th 2011
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Rick Pelleriti (RickPelleriti)
#363 ranked lender in California - 59 contributions

There is often a general correlation - but I would say the best way to monitor is to follow the MBS market. (Mortgage Backed Securities).That is the price the secondary market (like Fannie and Freddie) will pay for a bundle of mortgages at various interest rates.So - as that market changes - it directly influences pricing (and therefore rates) of the mortgages you are asking about.Find a mortgage banker who has the software to follow this.Since it is so critically important to spot the trends before a rate adjustment is made, that is why I track this diligently.Regards,Rick Pelleritirpelleriti@ascenthq.com530-205-9145

Mar 14th 2011
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Rudi Hofmann (CaPortfolioLoans)
#279 ranked lender in California - 380 contributions

These days any statistical data or world events may affect daily rates. Today's improved rates were due to the Stock Market. .... MBS prices are up +7/32 (FNMA 30-yr 4.5 at 102.01), below 9:45 et pricing of +9/32, and down from a midday high of +13/32.... Favorable repricing took place.... No economic data was released today.... MBS prices were heavily influenced by the movements in the stock market. The Dow was down 50 points.... Tomorrow, Empire State and Import Prices will be released at 8:30 et.... The announcement from the Fed meeting will come out around 2:15 et. Investors will we waiting to hear if the earthquake in Japan will have an impact on monetary policy. Happy funding, Rudi

Mar 14th 2011
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Daniel Lotter (dnllotter)
#27 ranked lender in Colorado - 58 contributions

you are correct

Mar 15th 2011
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Patrick McCarthy (PatrickM)
#22 ranked lender in Ohio - 196 contributions

Generally the 10 year treasury note is what you want to follow. Yesterday rates were about 4.75%. At this moment, the rate for a 30 year conventional fixed loan is approx 4.875% due to the 10 year Treasury yield increasing slightly over yesterday's price. Hope this helps.Patrick McCarthy, PatrickM@Northpointe.com; 866-901-3576

Mar 15th 2011
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