Aurora Mortgage Information
How does GSF Mortgage set your mortgage rate? We don’t…
How does GSF Mortgage set your mortgage rate? Well, actually we don’t.
While GSF Mortgage Aurora controls who gets approved for a loan with us and on what terms, actual mortgage interest rates are largely determined on the secondary market, where mortgages are bought and sold.
Fannie and Freddie’s Involvement
Fannie Mae and Freddie Mac, two large and influential mortgage investors, were founded by the government decades ago to help bring efficiency to the lending process. They and other mortgage investors buy loans that lenders make and either hold them in portfolio or bundle them with other loans into mortgage-backed securities. These are sold to Wall Street, mutual funds and other financial investors, which trade them much the same as Treasury securities and bonds.
It is these financial investors in the secondary market, not mortgage lenders and brokers like GSF Mortgage that collectively determine the interest rate of your mortgage loan.
As with the stock market, interest rates in the secondary market tend to move up and down. When the economy is on an upswing, investors demand higher yields, forcing lenders to raise mortgage rates. In a market downturn, rates tend to drop for consumers because of increased investor demand.
Conventional wisdom is that interest rates move in cycles; after a prolonged increase, a slow drop usually occurs. Some use 10-year Treasury bonds as a barometer; when bonds go up, interest rates go down, and vice versa.
For information on current rates, call your local GSF Mortage Broker in Aurora today! 630-806-7060
GSF Mortgage Corporation is a full service mortgage company dedicated to customer service. We are there to help before, during, & after the transaction.