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Author: Wings110 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35357  
Subject: Re: Bonds and mortgage rates Date: 9/16/2001 1:25 PM
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I'd like to know which to follow to see where mortgage rates "might" me heading. Thanks for help.

I'm a real estate broker and a recent college business grad, and in all my years, when the FED lowers interest rates, adjustable mortgage rates generally decline. A general rule, when interest rates decline, Bonds YTM goes up. ie. you receive more money...taxable...from your bonds. When the Fed increases the prime lending rate, interest rates, adjustable mortgage rates increase, and bond YTM decline.

If your mortgage rate is fixed, the rate remains the same. If your mortgage rate's an ARM, the rate declines.
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