Denver Real Estate Blog

Many people fear recessions, but they are natural parts of a business cycle.

As the nation’s protector of the economy, though, the Federal Reserve can weaken a recession’s impact on the economy by lowering the Fed Funds Rate.

When the FFR is lower, businesses and consumers pay less interest on business debt and consumer debt, respectively. This leaves more money available to spend on goods and services, thereby providing a subtle boost the economy.

This is why the Fed Funds Rate is integral to financial markets and why it gets so much attention in the press. It’s also why some people are calling for a drastic rate cut at the Fed’s next meeting — many believe that the economy is hurting pretty badly.

It’s not a coincidence that this outlook is causing mortgage rates to fall.

When Corporate America is struggling (or expected to struggle), investors don’t like to be over-exposed to the stock market because of its variable nature. By contrast, the fixed returns of the bond market provides a little bit more safety.

As demand for stocks wanes during a recession, therefore, demand for bonds can pick up.

Mortgage rates can fall at times like this because rates are “born” from the price of mortgage bonds. The higher the price, the lower the corresponding rate.

So, as investors leave the stock market and buy bonds — including mortgage bonds — the increased demand raises prices and pushes mortgage rates lower.

All of this happens independent of the Federal Reserve — it’s a natural function of the stock and bond markets.

The Federal Reserve does not control mortgage rates but it does control the Fed Funds Rate. And both tend to respond to economic weakness.

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Mortgage Resource

Dawn-Renee Mack has been a Colorado mortgage professional for nearly a decade. She received formal education at Bradley University in Illinois. Today she leads an experienced lending team, which includes not only 30 years of combined mortgage experience but vast accounting experience as well, Mack firmly believes with each loan she originates for clients, to treat your family’s home mortgage as if it were her own. She looks at every situation with an eye for what is best in the present and what will also help you accomplish your long term financial goals.

Dawn-Renee’s lending team firmly believes that client education is vital to a homeowner’s financial success. Through education and excellent service, she elevates what is often perceived as a frustrating and confusing process to a smooth, seamless home-buying experience. “I think the most important aspect of my job besides the planning of my clients’ mortgage future is to make sure they are educated about the process itself. Familiarity with what to expect allows a homeowner to relax, and that is my ultimate goal. Buying a house should be a positive experience!” Focusing solely on mortgages for her entire financial career has allowed Dawn-Renee to become an expert in her field. She knows the ins and outs of widely divergent programs, ensuring that all of her clients get the best possible loan, regardless of their specific situation.

Dawn-Renee Mack has access to over 350 investors and thousands of loan programs is invaluable to my philosophy that I will find the loan that fits my client, not force my client into a loan box that is not in their best interest.”, says Mack. If you have any questions regarding the current mortgage market. Feel you could benefit from an evaluation of your current mortgage loan and or any loan program someone else has proposed and want to make sure it’s really something you should be involved in you can reach her directly at 303-691-5058.