Mortgage rates may be at historic lows, but they’ve still jumped around somewhat in recent months, perplexing Americans mulling a home purchase this spring. It’s not always easy to pinpoint the cause of interest rate volatility, but much of it has to do with fickle capital markets, supply-and-demand dynamics, and even turmoil abroad. Outside investors play a key role in the mortgage marketplace, and demand for mortgage-backed securities heavily influences the direction of interest rates. When you take out a home loan from a bank, it’s unlikely that that same institution receives your payments. Instead, your loan is pooled with other mortgages – a process called securitization – to create mortgage-backed securities. Investors then buy mortgage-backed securities as part of their investment portfolio. If you’re getting serious about buying a home this spring, here are a few things besides your credit score that could impact the rate you get on your home loan. [Read this article]
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