June 4, 2015
Since our last report, we’ve seen mortgage loan rates moving higher due at least in part to overseas economic headlines that have put pressure on rates here at home.We’ve been reporting on European Central Bank headlines making investors at home behave in ways that have been pressuring rates higher. The European version of Quantitative Easing or QE (news of which had been a major factor in adjustments in mortgage loan rates when it was being done stateside in years past) has helped to add some volatility to the mortgage loan rate situation here at home.
Wednesday was no exception–A European Central Bank press conference did nothing to ease the upward pressure. Some reported waffling in that press conference on the nature of QE and under what conditions it might come to an end resulted in higher rates Wednesday. 30-year Conventional fixed mortgage interest rates have been flirting with the 4% zone for some time but today we find some best execution rates at 4.125%. That’s a far cry from last Friday’s 3.875% best execution according to our sources.
And the upward momentum may not end this week–we will likely be reported more on mortgage loan rates in the near to mid-term as significant developments add or remove pressure from the rates, but for now, FHA borrowers who have not yet locked in their mortgage loan interest rates should know that at present time FHA mortgage rates are holding, best execution, in their comfort zone of 3.75%.
However, there is no guarantee that comfort zone will last tomorrow or the next day. FHA mortgage loan rates vary more between lenders than their 30-year fixed rate conventional loan counterparts, so your experience will definitely vary.
And remember, when we use the phrase, “best execution” in relation to the rate numbers you see listed here, that phrase refers to the assumption that a well-qualified borrower is involved. That means outstanding FICO scores and loan repayment history as well as other financial qualifications. Your experience may vary and the availability of a participating lender willing to offer such best execution rates is key.
Many industry pros are advising against floating in hopes of a rate improvement, unless the borrower can afford to be wrong about the decision. Ask plenty of advice before locking or floating in this rate environment; an informed borrower is much happier with his or her decision in such cases.
Do you have questions about FHA 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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