April 4, 2016
Friday, much attention was on the Employment Situation Report, which has in the past influenced mortgage rates based on investor reaction to the information in that report. Ahead of that report, it seemed risky to float, or delay making an interest rate lock commitment with a lender in hopes of seeing rate move lower.
Floating is never risk-free, and ahead of a scheduled economic data release such as this, an elevated risk is present. But on Friday those who chose to float in spite of the risk were rewarded as rates moved lower. 30-year fixed rate conventional mortgage loan interest rates were reported at a best-execution 3.625% on Friday, ditching the previous range between 3.625% and 3.75%.
FHA mortgage loan rates have not moved out of their recent comfort zone between 3.25% and 3.5%. FHA rates tend to vary more among lenders than their fixed rate conventional equivalents, and with the recent back and forth it may take a few days of significant gains or losses to budge FHA mortgage rates from this comfort zone.
But sometimes events conspire to push rates dramatically and a single day change is also possible. It all depends on market conditions, investor reaction to those conditions, and other variables.
As always, the rates listed here are “best execution rates” which assume ideal conditions. Your access to these rates is determined by FICO scores and other financial qualifications. These rates are not available from all lenders or to all borrowers. Your experience may vary.
Locking and floating advice is mixed, but for those within 30 days or so of closing, evaluate your “risk tolerance” before choosing to float. If you can’t or don’t want to risk rates moving higher, discuss a mortgage rate lock with your loan officer and get some advice based on what’s currently happening. International economics and other news are playing an influential role in investor reaction and subsequent rate adjustments over the short term.
It’s never wise to ignore such factors when they are in play; keep in mind that breaking news can always cause short term gains or losses in the meantime.
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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