Do you need a funding number at closing
DDA Mortgage • August 26, 2019
Do you need a funding number at closing? The short answer is NO, but there are a few things you need to know.
You might not need a funding number at closing, but you do need these other things. Be prepared to avoid costly mistakes at closing.
Check out our other helpful videos to learn more about credit and residential mortgages.
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Here are the main types of events that typically cause the 10-year yield to drop: Economic slowdown or recession signs Weak GDP, rising unemployment, or falling consumer spending make investors expect lower future interest rates. Example: A bad jobs report or slowing manufacturing data often pushes yields lower. Federal Reserve rate cuts (or expectations of cuts) If the Fed signals or actually cuts rates, long-term yields like the 10-year typically decline. Markets anticipate lower inflation and slower growth ahead. Financial market stress or geopolitical tension During crises (wars, banking issues, political instability), investors seek safety in Treasuries — pushing prices up and yields down. Lower inflation or deflation data When inflation slows more than expected, the “real” return on Treasuries looks more attractive, bringing yields down. Dovish Fed comments or data suggesting easing ahead Even before actual rate cuts, if the Fed hints it might ease policy, yields often fall in anticipation. tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329
🏦 1. Fed Rate vs. Market Rates When the Federal Reserve cuts rates, it lowers the federal funds rate — the rate banks charge each other for overnight loans. That directly affects: Credit cards Auto loans Home equity lines of credit (HELOCs) These tend to move quickly with Fed changes. 🏠 2. Mortgage Rates Mortgage rates are not directly set by the Fed — they’re more closely tied to the 10-year Treasury yield, which moves based on investor expectations for: Future inflation Economic growth Fed policy in the future So, when the Fed signals a rate cut or actually cuts, Treasury yields often fall in anticipation, which can lead to lower mortgage rates — if investors believe inflation is under control and the economy is cooling. However: If markets think the Fed cut too early or inflation might return, yields can actually rise, keeping mortgage rates higher. So, mortgage rates don’t always fall right after a Fed cut. 📉 In short: Fed cuts → short-term rates (credit cards, HELOCs) usually fall fast. Mortgage rates → might fall if inflation expectations drop and bond yields decline — but not guaranteed. tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329
