Why Do Mortgage Rates Have to Rise?
Author: Evan Vanderwey
Website: http://www.lansingmimortgage.com/why-should-mortgage-rates-h…
Mortgage Rates – Why Do They Have to Rise?
Well they don’t have to. We cannot know the future. New and unknowable information creates the future for us, and even though we are told that certain things are going to happen, we don’t know for sure that they will until they do.
Let me give you an example. Most people are sure that rates will rise this year. But if you asked them to bet their $1,000,000 retirement account double or nothing on it, they wouldn’t do it. So are they really sure? They must not be or they would make that bet and double their money.
Yet we can make prudent decisions based on what we do know.
We know that the price of Mortgage Backed Securities determine interest rates.
We know that when the prices on MBS rise, rates go down.
We know that there have traditionally been two main buyers of Mortgage Backed Securities – Wall Street Investors and other countries (China mostly).
We know that in the past, when the Stock Market is struggling, market…
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