Interest rates are based upon the performance of stocks and bonds on the exchange markets that reflect how the economy is doing and how much confidence the American people have in the performance of available stocks. As stocks rise so do interest rates as consumer confidence reflects that people are willing to spend and have money to do so.
The factors of inflation and unemployment also affect interest that are set the federal reserve, who are the same institution that prints money and holds a supply of gold that is equivalent to the value of the money circulating throughout the world.
While people are concerned about their spending and what the stock performance will be very few people have an actual grasp of how the Federal Reserve Bank affects the economy and how an interest rate for a mortgage can be determined by a stock exchange that helps to set the rates people are paying for their homes.
While all of the mathematical equations and explanations are beyond the understanding of most people there is a connection to the amount of money people spend and what the interest rates will be for a home purchase or refinance. When it comes time to buy or refinance a home the interest offered to the borrower are the only thing that matter and it is up to the individual to secure and lock in the best interest rate possible by speaking to a mortgage lender and determining when and where the best time to refinance of buy a home may be. Although it is not an exact science a mortgage broker can help to find the best interest rates with the options of conventional, FHA and VA home loans.
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