May 4, 2016
Since our last look at mortgage loan interest rates (which were moving higher) we’ve seen stock market woes affect mortgage rates. As plenty of professionals will tell you, stocks don’t have a specific tie with mortgage rates, but investor reaction to woes of the market can and often do affect mortgage loan interest rates.
So while you won’t see a reciprocal effect with stocks (better or worse stock performance directly changing mortgage loan interest rates) you may notices that under the right circumstances, the kind of behavior happening now.
And that behavior is essentially, based on our sources, that stock market troubles this week are helping mortgage rates. 30-year fixed rate conventional mortgages have slid back down to 3.625% best execution, down from the range between 3.625% and 3.75%.
FHA mortgage rates are still in the previously reported best execution range between 3.25% and 3.5%. FHA mortgage rates may take longer to reflect adjustments in mortgage loan interest rates. You may find that FHA rates start to change after several days of gradual improvement or decline in conventional rates; a sharp change in rates could also push FHA mortgage loan rates into new territory. As we always say, FHA rates can and often do vary more among participating lenders than their conventional counterparts.
The best execution rates you see listed here are not available from all lenders or to all borrowers; your FICO scores and other financial qualifications will play an important part in determining your access to rates like these. Your experience may vary.
Will the current move lower persist until the end of the week? It’s difficult to predict, but some are advising borrowers to consider floating in the very short term, while others are quick to remind readers that rates are still sub-four percent best execution, making the overall rate environment attractive to those who don’t want to risk floating.
If you are within 30 to 60 days of closing, it may be best to discuss your situation with the loan officer and get some advice before choosing to float. Floating-holding off on an interest rate lock commitment with the lender in hopes of a better rate to come-is never completely free of risk. Make the most informed decision possible before choosing to float.
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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