April 21, 2016
Mortgage loan rates were on the rise on Wednesday. There have been scheduled economic data releases this week as well as a meeting of the European Central Bank (ECB), but market watchers point to bond activity as an important current factor for this week’s move higher. The ECB factor could still make a difference this week so it’s not safe to ignore overseas economic headlines when trying to make a lock or float decision in the short term.
30-year fixed rate conventional mortgages are between 3.625% and 3.75%, best execution. FHA mortgage loan rates are still in 3.25% territory but it’s not certain how long that best-execution rate will persist in an upward rate trend. Much could depend on how sharply rates move from here.
As always, best execution rates in general are not available from all lenders or to all borrowers. Your access to rates like these depends on FICO scores, loan repayment history and other financial qualifications. FHA mortgage loan rates tend to vary more among participating lenders than their conventional counterparts, so your experience may vary.
The lock/float question is less ambiguous, advice-wise, from industry pros this week. Many say locking is the smart move in the current rate environment. Floating-holding off on an interest rate lock commitment with your lender- is never without a degree of risk. But in the short term the risks are elevated at present and those who choose to float should decide in advance how high rates might climb before they make their interest rate lock commitment.
If you have a higher risk tolerance then you may be willing to gamble rates move back down soon; if you can’t afford the risk or don’t want to, talk to your lender and get some advice about locking. Borrowers with closing dates coming up soon (in the next 30 days) may have more to lose by procrastinating on that conversation. It’s best to get some good advice in the short term as we look to see which direction rates could be headed.
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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