July 19, 2016
Mortgage loan interest rates were unchanged to slightly higher on Monday, though some borrowers will have noticed Monday’s changes in the form of slightly higher closing costs rather than an actual change in mortgage rates.
We’re watching an overall upward trend in rates at the moment. World headlines continue to have potential to move rates, though the market hasn’t given much attention to certain issues such as the unrest in Turkey.
30-year fixed rate conventional mortgages were still at or near 3.375% best execution, depending on the lender and other factors. Some lenders are higher, some reflect the most recent moves in terms of adjusted closing costs (as mentioned above). FHA mortgage loan rates remain in their 3.25% best execution comfort zone.
“Best execution” refers to the rates offered under ideal conditions. A borrower’s FICO scores, credit history and other financial qualifiers play an important part in determining the interest rate for a mortgage loan. Your experience may vary, and the rates listed here are not available from all lenders or to all borrowers.
The advice in the short term seems to be more unanimous than usual. Locking now seems to be course of action industry pros favor. Rates are still low, and with an upward trend now fully on the radar those who choose to float need to seriously evaluate their risk tolerance and set a “breaking point” for how high rates will go before a commitment is made.
As we always say, floating is never risk free. But in an upward trend floating is more risky than usual, so it pays to have a conversation with your loan officer before proceeding.
There are some scheduled economic data release and other events this week that could have an effect on rates, one important day is Thursday when the European Central Bank meets. Given recent headlines this has the potential to move rates here at home, depending on investor reaction to what happens there. It pays to stay on top of events like these if you are considering floating rather than locking in the short term.
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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