You might wonder what goes behind the forever’ fluctuating mortgage rates. The answer would be inflation rates of the country and the financial policies set by the treasuries and the Federal Reserve. How? These factors along with few other fiscal factors, directly decide how much investors are willing to pay in order to invest in the mortgage backed securities, popularly known as MBS.
Here are a few crucial factors that come into play while determining the mortgage rates.
Inflation
The most easiest way to explain inflation would be increase in prices over time that significantly diminishes the purchasing power at the macro level of the economy. Literally inflation erodes the profit, which in turn makes the mortgage lenders to react by increasing mortgage lending rates. Why would they do it? To preserve the purchasing power of their returns.
Growth in the economy
When there is a growth in the consumer’s income, his/her purchasing power increases. Naturally this means that the consumer will incorporate his/her financial reserves in profitable investments. It is quite evident that when the money available at one’s disposal goes up, the economic stability gets strengthened. When the economy is stabilized, it drives consumers to become homeowners, thereby scouting for best mortgage lenders. This increased demand for mortgages generates upward scale on rates in reaction to the limited supply of loanable funds.
Fiscal policies
The nation’s central banking authority is one of the key influencers of the economy. Although, the Federal Reserve does not directly decide the rate of interest in the open market, it does influence the rates indirectly. They achieve this by adjusting the supply of money in the economy. For instance, by increasing the money supply, interest rate decreases and when the money supply in the economy is brought down, the interest rate increases. Hence, it is apparent that a home buyer should time their purchase.
Don’t miss the trends
Yet another great way to anticipate which way mortgage rates are headed is to look at the 10-year bond yield. Such information is readily available on financal websites or even in daily newspapers. Stock tickers also aid in understanding the trend. If the yield is going higher, mortgage rates increases and if it goes down, so will the mortgage rates.
To summarize, mortgage rates are also determined by several other economical, fiscal and governmental factors. Therefore, one should be vigilant enough to ace the research, so that they could make the right choices.
There are companies that work on collecting and maintaining credit information of consumers. These are known as credit reporting agencies (CRAs). There are three such major CRAs in the country, namely Equifax, Experian, and TransUnion. Apart from these, there are other smaller-scale agencies too that specialize at the job. If you’re worried about “where to get my credit score?,” the larger CRAs are the most reliable bets.
These major CRAs obtain information from companies that you hold business and transactions with. People or companies that lend you money regularly report to these CRAs on your repaying status. There is also detailed information on the amount you are indebted and whether you have ever defaulted on your payments. Aside from the reports obtained from lenders, these companies also tally your general records based on certain other aspects. Some of these aspects are your public records from the local and state judiciary. These include your tax records and bankruptcy information. This information makes up an important chunk of your credit score and its report.
Equifax
Present in 24 countries, Equifax is an agency that offers consumers protection against identity theft and credit fraudulence. They also sell credit reports and credit monitoring assistance to businesses.
Experian
Experian started off in London and is now a trusted agency in 39 different countries. It provides you with a credit score, credit report, and even credit tracker on subscription. The agency uses FICO 8 system of credit score calculation. Experian was a part of Forbes’ “World’s Most Innovative Companies” in 2018.
TransUnion
Based across 30 countries with a database of over 1 billion consumers, TransUnion is another CRA giant. The agency, like the other ones, will provide you with your credit score and your credit reports. In case you decide to freeze your TransUnion credit report, it will also go the extra mile to notify Equifax and Experian, which frankly is a big help especially in case of identity theft and credit fraud.
So, the next time you are sat wondering “where to get my credit score?,” think of these three giants that provide you with an annual credit score and credit report for free once each year. However, if you are looking for more frequent updates, you can subscribe to their services and receive your monthly updates.
Did you know that you have more than a single credit score? Agencies calculate your credit score based on the data in your credit reports. If you are wondering, “where to get my credit score?,” there are three main credit reporting agencies. These can have different credit scores for you if your information on each of their credit reports is different. Also, these agencies charge a fee to reveal your credit score.
Recently, it has become easier to track and get hold of your credit score without paying any fees. You can get it from your credit card company, your loan provider, and even from a non-profit counselor. Here are a few tips you can use to check your score.