June 30, 2016
Mortgage rates are still holding at or near 36-month lows. Brexit drama continues to be a factor in the low rates, but some market watchers believe that we’re about to see the first increase in rates soon, if for no other reason than what’s termed “bond market weakness” that could be an indication things are about to change soon.
But there is a three-day weekend ahead, and things tend to get a bit conservative around the holiday. Rates could, based on previous holiday activity, go into “defensive mode”, not changing dramatically one way or the other. On the other hand, we have seen assumptions like that proven wrong due to breaking news, changes in investor behavior, etc.
In other words, yes rates are low now, but it’s not safe to assume they will be this low indefinitely.
30-year fixed rate conventional mortgages are reported for a small number of more competitive lenders at a best-execution 3.25% which is dipping into FHA territory in the short term. But the more common best execution rate for 30-year fixed conventional mortgages is a range between 3.375% and 3.5%. FHA mortgage loans are still at 3.25% but it is far too early to tell if that will become a new “comfort zone” for FHA rates.
Remember, the rates seen here are listed as best execution rates and your access to them depends greatly on your financial qualifications. These rates are not available to all borrowers or from all lenders. Your experience may vary.
When it comes to locking/floating, borrowers do no harm in locking in mortgage loan rates at levels we haven’t seen in 36 months, according to some market watchers. Those who are interested in taking the risk of floating here might find a payoff according to our sources, but floating is never risk free and there is always a chance that breaking news or new developments (with or without Brexit drama) could push rates higher once more.
It’s always a good idea to discuss your lock/float strategy with your loan officer. Getting some advice will, if nothing else, make you a more informed borrower and help you make the most informed choice possible when it comes to the timing of your mortgage rate lock commitment.
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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