Mortgage rates have been fairly flat in the bigger picture, but each passing day continues to bring small scale movements. This is almost always the case, even if rate quotes don’t seem to be changing. One key reason for this is the difference between “note rate” and “effective rate.” The former is the rate that actually applies to the principal balance of a mortgage. The latter takes upfront costs into consideration as they are technically increasing the interest paid on money borrowed. Effective rates are easier to change than note rates because note rates are typically offered in .125% increments. It would take a big day of movement in the bond market to prompt a 0.125% change in rate. Upfront costs, on the other hand, can change in much smaller increments. So instead of .125%, a lender
Mortgage Rates Newsletter – Market Analysis
