Why interest rates are so awesome!

As the global economy grows large investors search for safe havens for their money, to insure maximum growth with minimal risk of loss, countries have to protect their money.  Stocks that are backed by corporations carry a higher level of risk then bonds that are back by the US Government (Treasury Bonds), and The homes of US Citizens (Mortgage Backed Securities).

Right now countries all over the world with money to invest are buying Mortgage Backed Securities (MBS). Why? Not for the rate of return, but for the safety. Their money is protected by the homes of the American people. If someone defaults on a mortgage the bank has real property to cease to limit the loss on the investment. This is huge for investors as there money is almost guaranteed. Right now Mortgage Backed Securities are the safest harbor for money in the world.

As the MBS are purchased in bulk the interest rates on new mortgage diminish, as they interest rates are changed to make the bonds more attractive to investors. So if sales are slow rates go up so they can offer more yields to investors as an incentive to purchase more MBS. If sales of MBS are going well they drop interest rates to make mortgages more attractive to the American people.

Right now MBS are being purchased at a high rate as they offer that safe haven for money, large amounts of money billions of dollars! I monitor MBS sales all day everyday to analyze when is the best time to lock in your interest rate to get you the best possible deal on a mortgage. Right now more then ever you need a mortgage expert in your corner. Apply online here!

Thadeaus Jones MBA

Mortgage Guy