July 2011

Found 1 blog entry for July 2011.

The first place to start when trying to understand how mortgage rates rise and fall is where the money to fund mortgages comes from.  Mortgage money comes from a variety of sources, including deposits at banks, but most of the funds come from investors through what is collectively known as “capital markets." Capital markets are where investors go to purchase securities like Treasury notes, corporate bonds, or Mortgage Backed Securities (a package of home loans bundled together into one asset). 

This is where things get extremely complicated, and the easy answer is that there are a multitude of market factors that determine the movement of Treasury yields. But for the sake of this discussion, let’s boil down those market factors and try to make sense

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