Book Yoda. Business & Investing.

What steps do I take? Do I check rates online? Call the bank I currently have mortgage with?

If you like the current loan, by all means call the bank you currently have a loan with. There are many different places to check out current rates for mortgages Just be careful and look at the points the lenders charge for those rates. You might think a lender has a good rate, but it is because you will be paying a lot up front for that rate. It pays to shop around. Good luck.

2008-01-22 06:15:27 by mel s

Interest rates charged by banks for personal loans range from 3 percent to 5 percent on average to as much as 20 percent. Find out how credit ...

I am working on a class assignment and am trying to finance a plan of a joint venture between 2 companies and need the going rate on short term debt like a bank loan and long term debt such as a bond or bank loan also.

if someone wants to get out of debt today it is pretty easy with a debt consolidation plan

I've found some good sources here...

http://loan.surveyland.org/

Good Luck.

2009-03-22 23:24:15 by Trinity B

Is there a connection between the interest rates banks set and the Bank of England's interest rate? Does the Bank of England control the retail bank's interest rates? Or do the banks set them independently of the Bank of England?

There is a conection between the two. When the BOE increases the rate this increases the rate that the retail banks have to pay back to the BOE. The retail banks naturally pass this on to their customers.

2008-02-23 13:43:45 by smsmgs2002

Bank are here to make money not to loose money, it looks like for short term that rates are low. What you think?

Yes, rates remain somewhat low historically speaking. No, mortgage rates have nothing to do with the Fed Funds rate.
No, low interest rates are not to blame for people loosing their homes. Greed, timebomb loans and irresponsible borrowing and lending, declining markets and fraudulent appraisals were the real culprits. This is the perfect storm for a mortgage crisis.

Banks make there money when they originate loans (junk fees), sell the loans to FNMA and FHLMC (gain on the sale by originating at premium rates) and through servicing income (they make 0.25% per year for processing payments and performing various other admin tasks on the loans the originate.

They do not generally hold the paper as they would be exposed the the interest rate risk that caused the S&L crisis 20 years ago. That is, if you originate a loan at 6% and rates go to 7%, your 6% mortgage would be worth less than the face amount as it would have to be sold to yield 7%. It may lose as much as 10% of its value. That would errode a banks capital like nothing else and could lead to its insolvency which would threaten the deposit insurance fund.

What rates will do in the future is pure speculation. Some market analyst are calling for the 10 year bond yields to fall by the end of the year. If that happens, the required net yields on the mortgage back securities in the secondary market(which drives what rates banks can afford to offer in the retail/primary mortgage market) should fall as well.

With that being said, my finance professor told me that we, as consumers, should not speculate about what will happen with interest rates. That is, if you need to borrow and you find a rate that you like, you should take it because it may not be there tomorrow. How true that wisdom rang this January when rates dipped to about 5.375% on a 30 year for about 6 hours before they shot back up 0.5% when the stock market started its recover.

Who is really loosing money? The people who insure the loans that are going in to default; the FHA, VA and the PMI companies and some of these other companies that supposedly insured the uninsurable loans called non-prime/sub-prime loans (these companies could not possiblly have charged enough to cover the losses on the loans they insured so they are largely bankrupt) and everyone who had investments in companies that bought into these pools of sub-prime loans.

Between the diminished home equity and actual losses due to defaults, I believe the that the actual losses will be around 2 trillion dollars by the time the crisis is really over.

All those people who talk about Bears Stern being a watershed are clueless about the liabilities that Countrywide has failed to recoginize. I think there could be hundreds of billions that will be scuttled if the merger with Bank of America goes through. Another back room deal in the making in the name of the governments "too big to fail" doctrine.

2008-05-14 19:36:31 by Steve t

If Countrywide or any other bank raised their relatively low CD rates, i'm sure they would be flooded with deposits. Countrywide just announced a $11.5 draw on their credit lines. I'm sure if Countrywide upped their CD rates to around the same rate that' s on the credit lines, around 6 1/2%, Countrywide could easily draw in $20+ billion in fresh deposits. In summary, I don't understand the headlines screaming "liquidity crisis" while banks are apparently not hurting at all for deposits and keeping their savings rates relatively low. Countrywide's highest yielding CD, for balances over $98,000, is 5.50%.

would that not create a very temporary & short term solution with a very drastic & dangerous problem shortly down the road?

If they just arbitrarily raise rates another whole point as you suggest, & hypothetically, it works & they get fresh cash. Since it will cost them that much or more to get that money, they will have to inflate the cost of lending to you & me, b/c they dont want to just break even or work at a loss. & guess who pays for that? Yes, you & me!

That "solution" will then create a much worse problem as they will continue to need more money just to make the interest payments to the high rates, & will keep needing to satisfy you by artificially making better rates available to people that will just take it & run in a year to a more stable company that is not about to declare bankruptcy. Then, they will need to start all over again. What do you think they are? the US Govt?

Are you going to invest in a company who is on the verge of bankruptcy? dont you want to help them out by putting $100k of your cash to let them pay bills that they are behind on & thier rating is droping by the minute? Do you think some people would be a bit hesitant to do so?

Institutions just cant jack up rates to any level "just because". That is a bad misconception that banks just make up rates to what ever they want them to be.

2007-08-16 09:39:17 by lucky_lenny_1964