April 12, 2017
In our last report, we noted that mortgage loan interest rates had been on the move, losing a small amount of ground over the previous two business days. We also noted that it was too early to tell if that was becoming a trend, or if the move higher was a short-term fluctuation. At the time of this writing, mortgage rates have since plunged to lows we haven’t seen for a majority of the year.
There are complex reasons why rates have suddenly moved downward. Global political headlines often play a role in the direction of mortgage rate movement, especially when those headlines have far-reaching implications. This week we’ve seen French elections, Russia and North Korea dominate headlines in ways that have investors moving their cash into safer bets, which include bond markets. Bond market activity can and does influence rates.
Those who have not yet entered into a mortgage loan interest rate lock commitment with a lender will be interested in the observations of some market watchers who believe we could be “on the verge” of a rally.
These market watchers may not all agree on if/when this could happen but it’s fair to say that floating, or holding off on a mortgage rate lock agreement in hopes that rates will move lower, might be a risk worth considering in the short term depending on how much risk you’re willing to take.
That is why it’s a good idea to decide in advance how high rates might climb (in the event of new upward movement) before you decide to “pull the trigger” and make the mortgage rate lock commitment. This can minimize the risk of floating somewhat, though floating is never without some degree of it.
At the time of this writing, 30-year fixed rate conventional mortgages are in a new low between 4.0% and 4.125% best execution. We have not seen conventional loan rates flirting with the lowest of the four percent range in some time, so this is a welcome development in the short term.
FHA mortgage rates have fallen back into the three percent zone, with a best-execution 3.75% reported at the time of this writing. It is important to remember that “best execution” rates assume idea conditions including a well-qualified borrower with outstanding FICO scores and other financial qualifications.
The rates listed here are not available to all borrowers or from all lenders. Your experience may vary. It’s best to shop around for the most competitive rates and terms when shopping for a mortgage lender.
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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