Question by crystal: why did the markets (forex and stock mkt) rally after the interest rates were raised today?
isn’t the interest rate rise supposed to lead to an appreciation in USD? also, why did the equity market surge?
Best answer:
Answer by silviano r
i dont know hahahahahahahah!
Add your own answer in the comments!
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Question by : What is the fx rates and how does it work?
Hello everyone!
I recently became interested in Forex Trading and it is very interesting for me. And my question:
What is the forex rates and how does it work?
Prompt response, if anyone knows. For a long time looking for the answer, but I can not find an exact answer.
Thanks in advance
Best answer:
Answer by JoeyV
You are very interested in forex trading but you don’t know what a forex rate is? Which aspect of forex trading are interested in?
Maybe you should go to a library or book store and get a book on forex and try to read it?
What do you think? Answer below!
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Mortgage Rates 101
Buying a home is one of the most important investments a person will ever make in his or her lifetime, so understanding the mortgage calculation process is very important if one wants to get the best deal possible. On most real estate websites, one will find a mortgage calculator. All that is required is for an interested person to enter specific information in the form fields provided. The system will automatically calculate the monthly payment for the mortgage.
For example, a down payment of ,000 toward a 5,000 mortgage loan will equates to a total monthly payment of ,532, at an interest rate of five and a quarter percent (5.25%). This value depends entirely on the zone, zip code, or area in which the home is located. Each zone has different tax rates, which will affect the total monthly payment. A zip code with a higher tax rate than 11798 will cause the monthly mortgage to be a lot more, although the down payment, purchase price of the home, and mortgage rate is the same in both areas.
The ,532 monthly payment is the total result of the principal & interest payment (4.00) and taxes & insurance payments (8.00) combined, so without taxes and insurance, the mortgage payment would have been 4.00. This is why it is so important to make sure one knows the tax rates in a given area before deciding to buy a home in that area. This example also shows that private mortgage insurance or PMIs can increase the overall monthly mortgage. What does this mean? This means that one should avoid paying mortgage insurance at, all cost, by paying more than 20% down payment toward the purchasing price of the home one is interested in buying.
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Therefore, instead of paying a down payment of ,000, which is 20%, toward a 5,000 mortgage loan, a ,000 down payment would have eliminated the mortgage insurance all together because that amount equates to 24.44% of the purchasing price of 5,000. This is if the bank or lender is reminded that more than 20% of the mortgage has been paid. It is therefore the borrower’s responsibility to see to it that the bank or lender cancel any mortgage insurance on the loan. Creditors are required by law, to cancel a PMI if more than 20% of the loan has been paid off.
The calculation above was set to a 30-year fixed rate mortgage instead of a 15-year fixed rate mortgage. The 30-year mortgage is a lot cheaper on a per-month basis; however, one ends up paying more in the long run. A 15-year home loan usually comes with a slightly lower interest rate than that of the 30-year programs. In addition, it costs more per month, but the borrower pays less interest overall.
A 0.5% maximum point was set in our calculation. This is a percent of the amount that borrowers typically choose to pay to the lender in order to lower the mortgage rate. It is sometimes referred to as a buydown. Paying more discount points at the closing lowers the mortgage rate, and paying less raises the rate. This amount is collected at the closing. One discount point is equal to one percentage point of the loan amount. Discount points are very important when trying to keep mortgage expenses to a minimum.
All calculation above was done using the fixed rate mortgage program. Therefore, the mortgage rate does not change in accordance to interest rates set by the Federal Reserve, the central banking system in the United States that regulates the financial infrastructure of the economy to maintain stability. In a fixed rate mortgage program, the borrower’s monthly mortgage payment does not change in response to the interest rate set by the Federal Reserve. In fact, lenders or banks will set their lending rates to two percent above the rate set by the Federal Reserve. So, if the rate set by the Federal Reserve is 3.25%, the rate set by creditors will normally be 5.25%.
In an adjustable rate mortgage program, the mortgage interest rate goes up or down depending on the direction of interest rates imposed by the Federal Reserve. The advantage of adjustable rate mortgage is that interest rates are usually set lower than that of fixed rate mortgages. Another advantage in using adjustable rate mortgage is when the Federal Reserve lowers interest rates. In this scenario, the borrower pays less on the mortgage each month. The disadvantage arises when interest rate increases. This means that the borrower has to pay more on the mortgage each month.
There is important information that homebuyers should be familiar with before embarking on the home buying journey. A knowledgeable home buyer will be more capable of making the right decision when it comes time to make crucial decisions. Therefore, learning the basics of mortgage acquisition and all the important information that comes along with it is paramount in getting a mortgage at the right price.
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Where can I get lower mortgage rates in Canada?
Well if you’re uncle or brother is a manager at your local bank, you don’t need to be reading this. For the rest of us, lowering our biggest financial burden is extremely important. The average person now spends .5 million in their lifetime with a huge portion of that allocated to mortgage payments. A simple change in number can save you 10s of 00s over the course of your lifetime. It’s extremely important to know what is the best way to get the best mortgage rate. So how do you get the best mortgage rates and how do you know for sure you’re getting the best option on Canada Rates?
1. Don’t let your bank push you around.
Lenders get paid to tell you that you’d be wise to take their option. They have networks of sales people designed to persuade you into taking their option. Make sure that you’re at least getting multiple quotes. Letting the bank decide for your is a big a mistake. If you get multiple quotes and they’re still your best option, proceed accordingly. Just be careful that you don’t get too many quotes as generally over 7 inquires on your credit will actually hurt your score.
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2. Know your situation.
The banks probably have a different assessment of “risk” than you do and will evaluate your mortgage rates in Canada differently than you would. The vast majority of us don’t have perfect credit and long term steady high paying job. The bank loves these types of loans because they’re as straight forward as they come. They cater to these types of loans. However, you may have errors on your credit you’re not even aware of. Studies have found that 79% of credit bureaus have errors on them! That means that if you’re less than perfect in the credit department, whether justified or not, the bank may not see it as clear as you. Think about it, they get paid to overcharge you. Furthermore, with a complicated employment situation or immigration issue, you’d be wise to steer clear from your bank. Your best bet is to seek other alternatives.
3. Use the system, don’t let the system use you.
A long time ago this country was founded on the principle of capitalism. Capitalism works because competition helps to generate the possible solutions for the consumer. This is no different for Mortgage Rates Canada. There are new revolutionary systems, like the ones at Canada Rates, which will have lenders work again to compete for your business. The system works by using on online algorithm that shops your mortgage for your without a formal inquiry. Then the system at Canada Rates, will give you offers from as many as the 5 best lenders. It’s about time they started working for you instead of the other way around.
No matter which way you go, don’t let the bank tell you what you’re going to pay. Evaluate your options fully because the savings are well worth it.
For more information about revolutionary mortgage systems, check out Canada Rates. You’re guaranteed to get the best possible offer from a lender and it’s absolutely free.
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Is it Possible to Predict Mortgage Rates?
Mortgage rates can fluctuate rapidly. With these unexpected changes, it can be hard to know exactly when to lock in a rate. Could you have saved money if you waited one more month? Or did you stall too long and miss a window of opportunity? Wouldn’t it be easier if there were a concrete way to predict mortgage rates?
No one can predict mortgage rates precisely, but if you pay attention to a variety of factors, you may begin to notice a trend. Unfortunately, even keeping an eye on the trends in mortgage rates will not tell you exactly when it is the best time to lock in a rate.
While it may be impossible to guarantee that you are locking in the lowest available rate, you can get a good interest rate by paying attention to the market and knowing what to look for.
In the past, it was much simpler to predict mortgage rates. They would typically follow the interest rates of corporate bonds, but lag behind by anywhere from six months to a year. And while this would not make it possible to determine the exact mortgage rate, it would provide some insight into whether mortgage rates were trending up or down.
This method was very effective when a bank or credit union made a loan and held that loan for the duration of the term. Today, that is not how lending works.
A mortgage is originated at a local bank, but it is then bundled and sold. Because mortgages are now considered investment vehicles, it is important that the interest rates be competitive enough to attract attention from potential investors. The mortgages are pooled into an investment group called mortgage backed securities.
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These securities have the same type of appeal as bonds, and the interest rate is typically comparable to that of a ten-year treasury bond. While the interest paid on a mortgage-backed security is higher than that of a ten-year Treasury, they will typically follow the path of the Treasury bond. For example, if interest rates for Treasury bonds drop, expect mortgage rates to drop as well.
Another consideration for predicting mortgage rates is the current rate of inflation. When inflation gets higher, mortgage rates go up too. And conversely, low inflation rates usually mean lower interest rates. There are, however, exceptions to this rule. If the federal government is working to stimulate the economy, mortgage rates may remain artificially low, even as inflation rates increase.
Finally, look at what large, national lenders are doing. Although there is no reason to expect all lenders to follow along with what these large lenders do, they often do. The business section of your local newspaper will probably tell you everything you need to know about what lenders are doing across the nations. Depending on where you live and the economic climate, you may see similar results within days or weeks. While the mortgage rates may not be the same, the trend will be.
While following these basic rules will give you an edge over less informed consumers, there are other factors that will affect your personal mortgage rate. Lenders look at individual borrowers when determining what rate they offer to a customer. A person seeking a mortgage that has exemplary credit, a hefty amount of money to pay for a down payment and some extra cash to pay on points will have a lower mortgage rate than someone who has some blemishes on their credit, little money for their down payment and not enough extra money to pay any points.
It is also important to understand the difference between a fixed rate mortgage and an adjustable rate mortgage. Fixed rate mortgages are typically higher than adjustable rate mortgages. The adjustable rate mortgage may seem like a better deal, but often the adjustable rate mortgage resets at a higher rate than the fixed rate mortgage.
It is important not to waste too much time worrying about mortgage rates. While we all want to save as much money as possible when buying a home, at some point you have to make the commitment to invest the money and close on the loan. While it may seem like a mortgage is a lifetime commitment, in many cases it is possible to refinance a mortgage.
If mortgage rates drop, speak to your lender. Some lenders will expect you to go through the entire lending process again when refinancing, while others will allow you to refinance without a new appraisal, deferring many of the closing costs. If your lender seems unwilling to work with you on this, shop around. You may find a better deal, or you may find that your current lender is more willing to work with you in an effort to keep your loan in house.
Mike Cole is a freelance writer who writes about the mortgage industry, often focusing on a specific topic such as current mortgage rates.
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