December 4, 2014
The Thanksgiving holiday interrupted several days worth of falling mortgage loan rates. We saw gains over six business days (holiday weekend falling in between some of those days) with best execution interest rates moving back into the high three percent zone for 30-year fixed rate conventional mortgage rates.
FHA rates benefited as well,–FHA mortgage rates fell (best execution) to 3.25%, and while in many cases we see FHA loan interest rates having a hard time breaking out of a comfort zone at the same time conventional rates change, December 1st saw FHA mortgage loan rates drop from the previous business day’s best execution rate of 3.5%, but would eventually settle into a range of numbers.
FHA mortgage loan rates moved into that range of best execution rates following some upward movement over December 2nd and 3rd. At the time of this writing, FHA best execution rates moved into territory between 3.25% and 3.5%. Keep in mind, best execution rates are not available from all lenders or to all borrowers. The FHA loan applicant’s FICO scores, loan repayment history and the availability of a participating lender may play an important role in access to those rates.
The future of sub-four percent FHA loan rates may depend on the highly anticipated Employment Situation Report that gets released Friday November 5, 2014. That report could help determine whether the rising rates we’ve seen in recent days is a new trend or not. Under the right conditions, we could see rates move back to where they were around the time the turkey day holiday interrupted regular market activity.
Should an FHA borrower commit to a mortgage loan rate now, or way? Some industry professionals are advising borrowers against “floating” for now–they say the gains you see from a favorable result on Friday may only be reflected in closing costs rather than an actual lower rate.
For the time being, FHA loan applicants are still looking at low best execution rates, especially when compared with 30-year fixed rates which are holding at the time of this writing at a best execution 4.0%. If you qualify for an interest rate in the neighborhood of 3.25% you definitely have an advantage over the conventional borrower applying for a rate lock at 4.0% or higher.
Do you have questions about FHA home loans? Ask us in the comments section. All questions and comments are held for review.
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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