Top 5 Questions Your Lender Should Answer About Mortgage Rates

Every first-time buyer has questions about mortgage rates.  Here a list of questions and answers about mortgage rates that every lender should answer.
Who determines rates?

Mortgage rates are determined by the pricing of Mortgage Backed Securities or Mortgage Bonds.

How often do mortgage rates change?

Mortgage rates may change throughout the day.  They change when Bond markets are trading securities since mortgage rates are based on Mortgage Bond Prices.  Mortgage Bonds are largely affected by the various market forces that influence the changing demand for bonds within the market.

When the Fed changes rates, why do mortgage rates move in the opposite direction?

It is a common misconception that when the Federal Reserve implements a rate cut it is immediately correlated to a reduction in mortgage rates.

Do different programs have different interest rates?

Conventional, FHA, and VA loans can all carry different rates on a 30-Year fixed mortgage.

Why are rates higher for different property residence types?

Mortgage interest rates are based on risk-based pricing.