July 15, 2015
On Wednesday, mortgage loan rates improved slightly after semi-annual testimony by the Fed Chair was delivered to Congress. Rates didn’t improve all that much, but with 30-year fixed rate conventional mortgage loans, we’re seeing reports of more lenders offering best execution rates closer to the bottom of the four percent range than yesterday.
FHA mortgage loan rates seem to have found a comfort zone, with best execution rates between 3.75% and 4.0% reported for many days now. Remember, your experience may vary–best execution rates are offered to borrowers with ideal credit scenarios. The rates you see reported here are not available to all borrowers or from all lenders. The availability of a participating FHA lender offering these rates or something similar may also be a factor
FHA mortgage loan rates may vary more between participating lenders, so don’t forget to include that in your decision making process.
In the last few weeks, we’ve seen the advice from industry professionals moving well away from “floating” and much more on the “lock” side of the equation depending on the day and the developments. But today, we’ve started seeing advice ranging from “float if you close 30 days or later” to “the high point may have been reached but examine the risks carefully before you float”. Floating refers to holding off on a mortgage loan interest rate lock in hopes that rates may go lower in the short term.
Is it ever “safe” to lock or float?
It depends on the amount of volatility present in the market, your ability to weather a bad uptick in rates before you lock, and a variety of other factors. Generally there is no safe float if you’re looking for something risk-free. But for those who worry about locking a mortgage rate too early should consider that recent mortgage rate changes have included some gradual improvements but also some periods of sharp declines.
Do you have questions about FHA loans? Ask us in the comments section. All comments are held for review.
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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