September 5, 2014
FHA mortgage rates can move higher or lower in any give day or week for many reasons. Those reasons can include overseas headlines (financial or political in many cases) that affect investor behavior in the USA. That was one of the factors this week when it came to rising FHA rates–there was market volatility based on the Russia/Ukraine situation, and we also saw domestic economic data that some market watchers predicted would end up competing with Russia/Ukraine developments as an influence on mortgage rates.
Monday was a day off for the markets, so when the three day holiday weekend ended, Tuesday’s rate activity included upward movement in small increments that didn’t change average “best execution” rates for FHA home loans. If you were investigating rates this week, it’s true you may have seen higher numbers depending on the lender–mortgage loan rates do vary from lender to lender, which is why it’s best to shop around for an FHA mortgage loan with the most competitive rates.
This week also saw at least one day where mortgage rate adjustments were mixed–so much so that trend spotting was difficult among financial institutions. Locking in an interest rate was definitely advice given by many this week as the rise and fall of the markets brought added volatility.
In terms of the average best execution rates this week, in spite of all the ups and downs, we see on paper that FHA rates have remained in a best-execution range average starting at or near 3.75%. (That rate is not available from all lenders OR to all borrowers. Applicants with exceptional FICO scores and other qualifying factors have better access to rates within the best execution averages.) One aspect of all this which can be confusing when we talk about rates moving higher without a corresponding change in the best-execution rate: how rates can be reported higher without that change in the average?
In situations like these the lender often adjusts closing costs to reflect the changes rather than altering the FHA mortgage loan interest rate. That means closing costs can increase or decrease depending on which way the rates are moving, but the best execution rate can stay the same. The end result is a change of the cost of the loan for the borrower.
Here are the mortgage loan rate averages for the week of September 2, 2014. The averages reported here are listed as best execution rates. They may not be available to all borrowers or from all lenders. These rates assume ideal conditions such as outstanding FICO scores and loan repayment history. Your experience may vary depending on the market, the lender, and other factors:
30-Year Fixed Rate Conventional Mortgage Loans: 4.125% or higher on average
VA Mortgage Rates: 3.75% or higher on average depending on the financial institution
FHA Mortgage Rates: 3.75% or higher, depending on the financial institution
15-Year Fixed Rate Mortgages: 3.25% or higher
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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