Скачать или смотреть Todd Gehrke Explains How Interest Rates Move

Mortgage Rates move based on the price of bonds, which are traded openly on the market. When bond prices go up, rates go down, when bond prices go down, rates go up. What influences the price of bonds? Market confidence and inflation indicators. To learn more reach out to Todd at [email protected].

Todd Gehrke: [00:00:00] Most people don't really know how the bond market works and how that affects interest rates. So bonds are traded every day on the stock market while on the bond market rather Wall Street. Just like Amazon Apple. Any of those stocks are. And so they've got a price every day one of the things that we do is we watch the bond market. So usually I'm looking at it on a quarterly basis right here. And what people the higher the price of the bond the lower the interest rates get so let's look at it this way. It's like buying a gas card. So let's say you could buy a gas card today for 40 gallons worth of gas and that's going to cost you a hundred bucks. So we've got a 40 gallons of gas that we're going to pay 100 dollars for. And so that works out to be two hundred and fifty two dollars and fifty cents per gallon. Right. So now here's the rub. It's a bond. So it's not going to mature. We can't use it for one year. So one year from today. So of course the first thing we're going to ask is What's the price of gas today to determine if this is a good deal and the second question is is do we expect prices to go up meaning there is inflation or do we expect them to go down. So let's assume that we expect the price of gas to go up and when we're looking at this we've got 40 gallons of gas.

[00:01:19] But we assume it's going to be three dollars per gallon one year from now. So that means that this bond is actually worth one hundred and twenty dollars one year from today which means if we're investing we may decide you know what I'm going to pay a little bit more. For this gift card that I can't use it for a year from now. Which raises the price and it lowers the yield on that. Now the other way to look at this is to say Ah well what happens if the price goes down to two dollars. So let's say the price goes down to two bucks. That means that the value of this bond a year from now is going to be eighty dollars but we're not sure exactly where it's going to be and we're negotiating it's on the marketplace these are open forbid. So we offer ninety dollars. So here's the price and here's the yield. And we say all right I'm gonna offer ninety dollars for this card which increases the yield that increases the interest rates. So we're looking at this on a on a daily basis and we want to see which direction the price of the Fannie Mae 30 year coupon is. So that'll tell us the higher we go on this chart. The lower interest rates are. License info here: www.newamericanfunding.com/licensing.aspx Todd Gehrke, Sales Manager, New American Funding NMLS6606