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: Mortgage Lender Implode-o-Meter

Mortgage Rates Still Not Allowed to Return to Normal

By Implode-Explode Heavy Industries

" A mortgage is nothing more than a long term bond, given to a borrower to purchase a home. So when lenders get fearful they're not being compensated for tying up money for as long as 30 years, they increase rates. Further, as the specter of inflation rises, lenders demand bigger interest payments to keep up with higher prices. In other words, when dollars in the future are worth less than dollars today, banks demand higher payments to make up the difference. "

Full post as published by Mortgage Lender Implode-o-Meter on May 11, 2009 (boomark / email).