April 23, 2015
Since our last report, mortgage loan rates have been flat overall, with the exception of yesterday’s move which saw rates moving higher. Many market watchers and industry professionals have categorized rate behavior as of late as “flat”, “in a rut” and with yesterday’s shift higher, “breaking free in the wrong direction”. It’s said that after a sustained period with no real movement, a push higher is not unusual.
30-year fixed rate conventional mortgages are hitting, best execution, 3.75% territory depending on the lender. We’ve seen FHA mortgage loan rates break into a new range with 3.375% as the bottom and 3.5% as the high end of this best execution range. That’s up from the previous 3.25% – 3.5% range reported last week.
Remember, the term “best execution” refers to rates being offered extremely well-qualified FHA loan applicants (and their conventional counterparts). Your FICO scores, loan repayment history and other factors will play a big role in determining your access to these rates.
Many industry professionals are currently advising people to get an interest rate lock rather than “floating” over the short term in hopes that a better rate might come along. In cases like these, where rates don’t move downward and could be pressured higher by breaking news, economic reports, etc. this is sound advice and a borrower should consider floating in the current rate environment very carefully. Always ask for advice and make the most informed choice you can.
Next week there is a scheduled Fed announcement that could influence rates one way or the other. Borrowers should consider that rates may continue in their current trend up to that announcement–we’ve seen that behavior before–and there’s no promise that investor reaction to what the Fed has to say won’t push rates higher. Food for though going into next week.
Do you have questions about FHA home loans? Ask us in the comments section.
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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