Mortgages, Mortgages, Mortgages.

A top question of buyers is on interest rates. Though the news and reports shared in this blog have noted the pressure on mortgage rates, mortgage rate question keeps arising.


To know the answer, you just need to look the Bank straight in the eye!!!



                                         1 yr CD

                  



                                                    
Institution      APYRate                                                                                 Min Deposit 
  Ally            1.29%        Fri Jan 21            1.28 %     Compounded daily                $0

Always competitive rates. No monthly fees. Member FDIC.

Aurora          1.27%    Fri Jan 21                1.26 %   Compounded daily                  $1,000
Apply now! Bankrate.com TOP TIER Award winner. FDIC Insured.

Bank of Internet USA   1.36%      Fri Jan 21   1.35 %   Compounded daily               $1,000

Ascencia, a div. of PBI Bank  1.35% Fri Jan 21  1.34 % Compounded monthly           $500

Colorado Federal Savings Bank 1.35% Fri Jan 21  1.34 %  Compounded daily           $5,000

Discover Bank    1.30%  Fri Jan 21   1.29 %             Compounded daily                   $2,500

Incredible Bank   1.30%  Fri Jan 21   1.30 %           Compounded quarterly              $10,000

Goldwater Bank  1.26%   Fri Jan 21  1.26 %               Simple interest                      $5,000

VirtualBank        1.26%   Fri Jan 21  1.25 %            Compounded daily                   $10,000

These rates are 3/4% to 1% higher that you could have seen from any bank 3 months ago!!!


How do banks make money??? On the spread between what they pay you and me and what they can charge for interest on car loans, furniture loans, ect. THUS, IF THE BANKS ARE WILLING TO GIVE 1% MORE TO YOU ON A 1 YEAR CD, THE BANK WILL CHARGE A MINIMUM 1% MORE ON THE CAR LOAN THAN PREVIOUSLY.

Does this track perfectly to mortgage rates? Never has historically BUT they do march together up or down...never see CD rates high when mortgage rates are low!!!

The Fed continues to do QE2 purchases of Treasury Bonds to "artificially" reduce interest pressure on these bonds that compete directly with mortgage securities...$600 Billion dollars worth.

But Mortgage Rates continue to march up as the financial markets are demanding more interest return due to the competition from the Stock Market.

So can you guess what will happen when the "artificial" Fed relief on interest rate pressures gives way to "natural" market pressures???

Questions???   Pass it on or push back!!!