Mortgage interest rates go up and they go down and are dependent on a few factors with the cost of funds and the availability of those funds. The Federal Reserve can reduce interest rates but they can also increase the money supply. We have been comparing mortgage interest rates ever since November 2007. The sub prime lending crisis has had a unhelpful effect on the availability of the funds. In the past, lenders and mortgage brokers passed the loans beside to a secondary market who bought the loans in bundles.
As long as these loans were purchased by others, the lenders could go on to loan out more money. That secondary market tanked and the evade funds and security purchasers quit buying the bundled mortgages. The nations main lender, Countrywide, suffered this fate. The mortgage agent and originator was unable to re-coup their funds from the secondary market. Countrywide could not longer compose many loans. Since November rates have dropped, but the accessibility of funds has been tightened. Lenders have become much selected in their lending practices because it has become more complicated to resell those loans. So what should these lenders perform? The foreclosure rate has risen making it still harder to put up for sale a home. Banks are taking these homes back on an alarming rate. The banks need to begin working with the borrowers who are suffering from the high interest rates after they reset. Our survey has shown that since November rates have dropped from 6.4 percent (APR) to about 5.8 percent (APR). These rates are based on a new acquire loan from $300,000 to $417,000. We removed nationwide lenders from the calculation.