Is mortgage rate related to sotck market? If so, how? I heard we are due for a market crash in Oct.

Mortgage rates and stock markets are not directly related. Mortgage interest rates come from the FNMA coupons, which are traded on Wall Street just like stocks. When those bonds are up, that means more money is available to lend and interest rates come down.Often, when stocks are down, the FNMA coupons are up. And when stocks are up, FNMA coupons are down. This normally happens because when stocks are up, investors pull thier money form the safer coupons to invest in the higher yielding stocks. When stocks are down, investors look for a "safer" place for their money such as the FNMA coupons.Keep in mind it doesn't always happen that way. Sometimes both can be up and both can be down. However, because stocks and coupons normally have an inverse relationship (when one is up the other is down) it appears that stocks affect interest rates.Even though stocks don't directly affect interest rates, they CAN indirectly affect interest rates because of how investors react.Hope that helps!Ron Pippin"the Loan Doctor"http://www.HelpMeWithAMortgage.com

George had a good answer for you..."they compete for the same dollars." Long-term mortgage rates are effected by Mortgage Backed Securities/Bonds, and are not directly affected by the Stock Market; however, Mortgage Backed Securities/Bonds typically benefit as the "safe haven" from a riskier/more volatile stock market. So, if we are in fact due for a stock market crash in Oct., then mortgage rates/mortgage backed securities may benefit, unless the stock market TRULY crashes, in which case there will be a larger economic impact that will devastate our economy. I have some articles that may be of interest to you and a market newsletter I could subscribe you to if you'd like to know more about the technicalities of it. Just visit me at http://www.homeloansinutah.com/forms/askAnExpert.html and request my weekly market newsletter. Since I'm here in Salt Lake City, Utah, I can also answer your more local market questions and concerns. Hope this helps.

The stock market and the bond market compete for the same dollars. The usually move in opposite directions but not always. When the stock market is doing poorly investors move their money to the bond market as a safe haven. The more people invest in the bond market the price of bonds will increase and rates will drop.Please let me know if you have any other questions.George Weisenburger801-274-6555george@loangeorge.com

Mortgage rates are not directly tied to the stock market. Indirectly mortgage and bond rates are tied to the stock market. In uncertain times when the ecomomy is in or near recession, investors have a tendency to take their money out of the stock market and put it into the bond market or into a government security such as treasuries or FNMA back or FHA back mortgages.

In today's economy rates can move in either direction due to some statistical fact or major event. Mortgage Backed Security (MBS) movement use to be the major force. Prior to that, it was the 10 year T-Bill. .... Happy funding, Rudi