January 4, 2016
In the last week of 2015, we saw mortgage loan rates creeping higher, staying above the four percent mark for 30-year fixed rate mortgage loans. A holiday week can keep rate movements conservative, and two holiday weeks in a row can make things quite calm, but that quiet did not prevent the upward drift of rates.
30-year fixed rate conventional mortgages closed out 2015 in a best execution range between 4.125% and 4.25%. FHA mortgage rates, in spite of the upwards creep we’ve seen in the past two weeks, did not move from their best execution comfort zone of 3.75%. That best execution rate tends to vary more among participating lenders than with conventional loan equivalents, so your experience may depend on the lender.
Additionally, best execution rates are not available to all borrowers or from all lenders. Your access to these rates depends greatly on your FICO scores, loan repayment history and other factors. The availability of a participating lender offering these rates may also play a factor.
Locking/floating advice at year’s end was mixed. Choosing to lock in a mortgage rate or “float” and delay that commitment with your lender is a decision only the borrower can make–it’s best to ask for some advice of your lender before deciding, especially in times where market volatility may play a role in that choice.
2016’s first mortgage rate behavior (at the end of the market day) has yet to be published at the time of this writing, but the new year could bring some interesting activity, especially since the Fed’s December announcement to raise interest rates and the market’s late-year reaction to that development.
Some market watchers speculate that rates may continue to creep higher, tempting many undecided borrowers to consider locking in a mortgage loan interest rate sooner rather than later. We’ll be keeping an eye on the trends in the coming weeks. Will rates continue to rise? Or will they find a leveling off point in the new year? Time will tell.
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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