December 11, 2015
Thursday saw mortgage loan interest rates move higher ahead of this week’s much-anticipated retail sales report. On Thursday we saw 30-year fixed rate conventional mortgage loans move higher (4.0% best execution depending on the lender), though borrowers may notice the increase in closing costs instead of an actual higher number from the day before.
The FHA mortgage loan rates stayed (best execution) in the 3.75% comfort zone, but those who shop around for a lender will notice more variation in FHA mortgage loan rates than with conventional equivalents.
And then there was Friday–a day where the Retail Sales report could have been a spoiler for rates depending on the report and investor reaction to it. But at the end of the day, rates moved lower, putting 30-year fixed rate conventional mortgages back into a more solid range of best execution rates between 3.875% and 4.0% depending on the lender.
FHA mortgage rates continued in their best execution comfort zone at 3.75% on Friday–it can take more sustained change (or one or two days of more dramatic change) to push FHA best execution rates into a new position but as previously mentioned you’ll find more variation among participating lenders so it pays to compare.
As always, best execution rates are not available to all borrowers or from all lenders. Your experience may vary depending on your FICO scores and other financial qualifications, which play an important role in your access to such rates.
Next week is an important one as the Fed will meet and there will be discussion of that December rate hike. Investor reaction to the Fed meeting will play an important role in the short-term direction of mortgage loan rates next week, and it’s going to be a very interesting ride.
The Fed meeting is set for Wednesday. We could see volatility in rates leading up to that meeting. Some industry pros are going on record saying that locking is a good idea for those undecided at this point, others say they may be on the fence but that floating might not yield big rewards in the short term due to uncertainty over the Fed meeting. No matter what your inclination might be for a mortgage loan interest rate lock going forward, it’s best to ask for some advice from your lender ahead of this crucial event, especially if your closing date is soon.
Do you work in residential real estate? You should know about the free tool offered by FHA.com. It is designed especially for real estate websites; a widget that displays FHA loan limits for the counties serviced by those sites. It is simple to spend a few seconds customizing the state, counties, and widget size for the tool; you can copy the code and paste it into your website with ease. Get yours today:
http://www.fha.com/fha_loan_limits_widget
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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