The market changes on a daily basis. So what mortgage rates may be one day may change the next. What affects mortgage rates and pricing to change?

When buying or refinancing a home it is important to do your homework, pay attention to the market, watch for trends, and try to start the home mortgage process at the best opportune time. Easier said than done!

There are many contributing factors when it comes to mortgage rates. First, when the market loses competitive value and investment products in all markets such as stocks, bonds, banking, and others lose their luster, the United States Federal Reserve will asses these markets and usually raise interest rates to make these markets competitive again. In the mortgage market new loan products become very competitive. If interest rates rise to attract investors, they must also remain low enough to attract borrowers. These changes of mortgage rates or interest rates are reflective upon the direction of the economy such as economic growth, supply, demand, inflation, employment rates and several other factors.

Some of these other factors that affect mortgage rates may be a high volume of mortgages that are originated during a specific time. Analysts for the Federal Reserve will try to accurately asses when these periods occur so they can inflict changes in interest rates. One example is when a great volume of adjustable loans come due around the same time, the Federal Reserve may drop rates to help homeowners from rising mortgage payments so they can in turn refinance and get into fixed interest rates. This is why it is important for the borrower to do their homework so they get into the best loan possible so their financial future is not compromised.