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Where does the risk / exposure to interest rates come from in this example? Intuitively the loan already exists, this would just be a bridge.
by sdwr 4y ago
Where does the risk / exposure to interest rates come from in this example? Intuitively the loan already exists, this would just be a bridge.
- sokoloff 4y agoIf mortgage rates fall, people will refinance or take new loans when they move. If mortgage rates rise, these loans will be held to term and every new property that this is moved to, the lender will be originating a mortgage at 3% when the market is at 6%, 9%, or whatever.