Mortgage Facts: How Mortgage-Backed Securities (MBS) Influence Rates

 Mortgages can be complex if you don't have a professional mortgage lender at Lake of the Ozarks to help you better understand some of the intricacies. That's why I'm here, to share my years of experience and help educate you on mortgages so that you can make informed decisions. In this week's blog, we're going to cover Mortgage-Backed Securities and how they can influence rates. 

What is an MBS?

A Mortgage-Backed Security (MBS) is an investment, similar to a bond that consists of a bundle of home loans bought from banks that issues mortgages. These asset-backed securities provide investors with periodic payments that work similarly to the ones you'd receive from bond coupons.

How they Work

MBS places banks as the middleman between homebuyers and investors. The better the mortgages, the better the MBS performs. So, it's a win-win for granting quality mortgages to home buyers and investors alike. Investors buying MBS are basically lending money to home buyers. To be sold on the market, an MBS must be issued by a government-sponsored enterprise (GSE) or private financial company. There are many regulations and due diligence performed analyzing each mortgage being sold in the bundle to ensure quality standards are met. As for how they influence rates, mortgage rates are set based on financial markets when they open each day. When MBS prices drop, rates are raised, and when prices rise, rates are lowered. 

Types of MBS

Collateralized Mortgage Obligations (CMO):

This type of MBS is made up of multiple pools of securities. These "tranches" are reviewed and given credit ratings to determine the rate of return to investors.

Pass-Throughs:

This type of security is set up similar to trusts in which mortgage payments are collected and "passed through" to investors. Since they're set up as trusts, these typically have stated maturities of five, 15, and 30 years. These maturities can vary depending on the number of principal payments on the mortgages that make up the pass-through.

Team Lasson: Your Mortgage Professionals at the Lake

I hope that you have learned some valuable information about the mortgage industry, how MBS work, how they can influence mortgage rates. As the best mortgage lender at Lake of the Ozarks, I take pride in assisting my clients not only in obtaining top-tier mortgages for their homeownership needs but educating them as well so they can make the most informed decisions possible. With that being said, if you're looking to obtain a mortgage at Lake of the Ozarks or are interested in refinancing your home to take advantage of our great rates, give me a call!

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Michael Lasson

Senior Loan Officer

NMLS #: 493712

4655 B Osage Beach Parkway

Osage Beach, MO 65065

Direct: (573) 746-7211

Cell: (573) 216-7258

e-Fax: (866) 397-0318

Email: mlasson@fsbfinancial.com

Website: www.YourLakeLoan.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.

Interesting Things to Know About Mortgages

Mortgages are one of the best and easiest ways to get a home. With funds for a down payment, it can be easier than ever to apply and get approved. This can be great news for second home buyers looking to purchase a vacation home at the Lake of the Ozarks, as well as for first-time homebuyers looking to settle down at the Lake of the Ozarks. As you start making plans and considering your next steps for buying a Mid-Missouri home, keep these interesting facts in your back pocket.

The Lowest Mortgage Rate - It was LOW!

In late 2012, the average interest rates for a 30-year fixed, rate mortgage hit 3.31%. The rates for 15-year mortgages were below 3%.

The Highest Mortgage Rate - It Was HIGH!

In late 1981, the average interest rate for a 30-year fixed-rate loan hit 18.45%! If you are not sure how this would affect your mortgage, think about it this way. If you have a $200,000 30-year fixed-rate mortgage (for a $250,000 home), a 3.31% interest rate would be about $877 a month. An interest rate of 18.45% would take the monthly payment to $3,088 - go ahead and pick your jaw up off of the floor.

Paying Additional Funds Each Month Can Shave Years Off of Your Loan

It’s not rocket science, making extra payments can help build equity and reduce your debt faster, but do you know the real effect that it can have? By taking your principal and interest payment for the month and dividing it by 12 and adding that amount to your monthly payment as additional principal each month, you can reduce your 30 year mortgage by more than 11 years.

What Was the Most Expensive Home Ever Sold?

Currently, the record goes to 521 Round Hill Road in luxurious Greenwich Connecticut. The property features 8 bedrooms, 8 full baths, 4 half baths, and 17,603 square feet on 40.26 acres. it sold for $49,895,000 - just shy of $50 million! If the undisclosed buyer took out a mortgage for that home, 20% down would be around $10 million, and their estimated monthly mortgage with taxes and insurance would be around $243,930!

Automate Your Monthly Payment

Did you know that you can automate your monthly mortgage payment? Set up automatic money transfers from your bank account or paycheck to go directly to your mortgage servicer. This helps eliminate the risk forgetting to pay a bill.

A Good Credit Score Can Help

Your credit score is a very important part of the mortgage puzzle. It’s always a good idea to keep an eye on your credit score.

Know What Your Loan’s APR Rate Is

Compare your annual percentage rates (APRs) when you are looking for your Lake of the Ozarks mortgage. While it’s easy to focus on the interest rate that you’ll be getting, an easily forgotten aspect is the closing costs. The APR reflects the true cost of your loan.

Your Lake of the Ozarks Mortgage

Now is a GREAT time to buy a home at the Lake of the Ozarks, and Team Lasson would be honored to help. From buying a vacation home at the Lake of the Ozarks to buying your first home, we are here to assist. Visit our website to learn more about our mortgages at the Lake of the Ozarks, or give us a call at the number below - we look forward to helping you get your home.


For Lake area news, resources and tips on financial services, please 

LIKE my Facebook Page, Follow me on Twitter or Connect on LinkedIn

Michael Lasson

Senior Loan Officer

NMLS #: 493712

4655 B Osage Beach Parkway

Osage Beach, MO 65065

Direct: (573) 746-7211

Cell: (573) 216-7258

e-Fax: (866) 397-0318

Email: mlasson@fsbfinancial.com

Website: www.YourLakeLoan.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.

6 Mortgage Facts to Know

Mortgages can be quite complicated. If you've never purchased a mortgage before or you're re-entering the buying market after some time, you may not completely understand how mortgages work today. Keep reading to learn some important facts about mortgages from your Lake of the Ozarks mortgage lender that you'll want to know:

1. Interest Rates Change Rapidly. 

Many homeowners ask, "What's the rate?" Unfortunately, that question is nearly impossible to answer. Not only does the rate available to you factor in your financial situation, but interest rates are constantly fluctuating. Interest rates change the same way that stocks, bonds and other financial investments rise and fall throughout the day. with currently favorable interest rates, it's not much of an issue, but it could be in more challenging interest rate environments. Therefore, it's important you lock in a good rate when you can.

2. The Interest Rate Isn't The Only Rate To Be Concerned With. 

While you obviously want a low interest rate, since that determines the amount of interest you pay over the life of the loan, there's more to it than that. The APR, or Annual Percentage Rate, measures the total mortgage cost to you. In addition to interest, the APR includes origination fees, closing costs and any mortgage points you may buy. Therefore, the APR gives you a better gauge to use for mortgage comparisons.

3. The Better Your Credit, The Better Deal You Can Get.  

Taking care of your credit is more important than you might think. The better your credit, the better your chances are for not only getting approved for a mortgage loan at the Lake of the Ozarks, but also getting a better rate. While there are programs out there to help those with not-so-great credit get approved for a home loan, they aren't going to give you a great deal.

4. You Don't Have To Have a Large Downpayment to Buy a House. 

You may have heard in the past that you need 20% to put toward a downpayment for a house. Fortunately, that's no longer the case. While 20% down would give you immediate home equity and the ability to avoid private mortgage insurance, it's not required. There are a variety of Lake of the Ozarks home loan options that require anywhere from just 0-5% down upfront. Talk to your lender about the options available to you.

5. You Can Refinance Your Home at Any Time. 

You can refinance your home at the Lake of the Ozarks at any time. However, that doesn't mean you should. Refinancing has it's benefits, but you need to make sure it's right for you. Think about the reason you want to refinance. Is it to lower your monthly mortgage payment? Is it to take advantage of lower interest rates? No matter the reason you're thinking about a refinance, make sure that it makes financial sense. Do the math and make sure you're coming out on top and not paying more in fees than what you'll save in the long run.

6. You Can Still Get A Mortgage Loan After a Foreclosure. 

If you've been through a foreclosure on a home, whether due to income loss or other unfortunate circumstances, there's still some good news. Once you get back on your feet and get your finances in order, you can apply for a mortgage again. There are different waiting periods depending on the type of loan you're looking to get. For example, an FHA loan requires you wait 3 years after a foreclosure, while a VA loan only requires a 2 year waiting period.

If you're considering a home purchase at the Lake of the Ozarks, give me a call at 573-746-7211. As your mortgage professional at the Lake of the Ozarks, I'll discuss your options, offer competitive rates and back it up with the first-class service you deserve!

For Lake area news, resources and tips on financial services, please 

LIKE my Facebook Page, Follow me on Twitter or Connect on LinkedIn

Michael Lasson

Senior Loan Officer

NMLS #: 493712

4655 B Osage Beach Parkway

Osage Beach, MO 65065

Direct:  (573) 746-7211

Cell: (573) 216-7258

Fax:(866) 397-0318

Email:  mlasson@fsbfinancial.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.