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Interest Rates - A Simple Explanation

 

This is an incredibly simple explanation of the term "Yield Spread Premium" and how interest rates don't change, the price does.

Your buyers will love this.

 

Via Rick Pelleriti-MBA & Upfront Mortgage Broker (Clarion Mortgage Capital, Inc.):

 

Borrowers always ask me if I think interest rates will go up or go down.  I can now tell them with 100% certainty what will happen.


Here it is......


Interest Rates will stay the same  - they will never change.


Does that sound odd to you?  I agree that it might.


However, it is true, and I will now explain what I mean.

Many borrowers do not realize that every interest rate has a PRICE.  It is the PRICE that changes, NOT the rate.

So, one day...4.75% may have a price of 100.000, and the next day, the price may improve to 100.125 (or maybe even in the same day).

Here's a video I created to explain in detail what all these rates and prices mean.

This should make it very clear.

 

Video of How I Work as an Upfront Mortgage Broker.

 

Rick Pelleriti, M.B.A.                                                                   
Clarion Mortgage Capital, Inc.
California Upfront Mortgage Broker
DRE #01466511

530-205-9145 (Direct)
408-672-1980 (Cell)
408-503-0900 (Fax)

www.upfrontmortgageplanner.com

rick@upfrontmortgageplanner.com

 

Jane Peters, connecting you to the L.A. real estate scene

Buying or selling real estate in Los Angeles can be an overwhelming process.  Contact Jane Peters, Los Angeles realtor specializing in absentee owners, out of town buyers, and those who need that extra attention, in order to make the transaction a smooth, trouble-free, and fun experience.

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6 comments • Jane Peters - Los Angeles Real Estate DRE# 01439865 • February 28 2010 09:23PM

Comments

Rick is great isn't he? I love the way he explains things even though this one sounds a bit strange :)
Posted by Judi Barrett~Integrity Real Estate Services~Idabel, Oklahoma about 2 years ago

Judi,  he is great isn't he.  Strange?  How so?  :)

Posted by Jane Peters - Los Angeles Real Estate DRE# 01439865 (Power Brokers Int'l) about 2 years ago

Hi Jane,

Now that is thinking out of the box and creating a clear and concise way to be answer the inevitable question "what is going to happen to the interest rates?" I love his explanation and have it now booked market. Great find!

Posted by Dorie Dillard Realtor® Canyon Creek NW Austin TX homes for sale (Coldwell Banker United Realtors) about 2 years ago

Dorie,  thanks, and thanks to Rick.

Posted by Jane Peters - Los Angeles Real Estate DRE# 01439865 (Power Brokers Int'l) about 2 years ago

Thanks Jane for the reblog and nice words.

 

Judi and Dori - well, thank you both very kindly!

Posted by Rick Pelleriti-MBA. Freedom Mortgage (Freedom Mortgage) about 2 years ago

Rick,  you are most welcome.

Posted by Jane Peters - Los Angeles Real Estate DRE# 01439865 (Power Brokers Int'l) about 2 years ago

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