January 14, 2015
Mortgage loan rates have in general hit some amazing lows in the earliest days of 2015. At the time of this writing mortgage loan rates dipped to lows some sources report not available since May 2013. For some extremely well-qualified borrowers, mortgage loan best-execution rates have actually dipped to at or near 3.5% for 30-year fixed rate conventional mortgage loans.
That’s a rate not available to all borrowers or from all lenders–access to best execution rates depends on the applicant’s FICO scores and other financial qualification. But suffice it to say that home loan rates are looking very competitive in 2015 thus far. Many borrowers who can’t access the 3.5% best execution rate may be able to get quoted 3.625% (again, based on extremely well-qualified borrowers with excellent FICO scores and a participating lender willing to offer that rate.
Domestic financial factors such as a weak Retail Sales report have influenced rates–weakness in such reports can have a positive influence on mortgage rates, as can certain overseas headlines and developments. This week the overseas influences include headlines about the European Central Bank’s bond purchasing program. Will these influences continue to help keep rates low? Only time will tell, but breaking news could easily push rates in the opposite direction depending on a variety of factors including investor reaction to those headlines.
With these incredible lows, what is happening with FHA mortgage loan rates?
FHA rates found a best-execution comfort zone of 3.25%, which is where the rates have remained during the continued improvements for conventional home loans. There is more variation among lenders for FHA rates, so it pays to shop around for a lender willing to offer you the most competitive interest rates. As with conventional loans, 3.25% is not available to all borrowers or from all lenders. Your FICO scores and other financial factors play a big part in your access to best-execution rates.
There is, according to several sources, some volatility present and possible in the future with these currently low rates–some advise an interest rate lock in the short term to avoid getting burned by sudden reversals in the latest round of downward movement. The choice is up to the borrower, but floating always carries a degree of risk–something that should be taken into consideration when choosing your course of action.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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