May 8, 2015
Since our last report, mortgage loan rates have moved higher and faster than they have for much of 2015. Four days in a row of upward pressure on mortgage loan rates saw 30-year fixed rate conventional loans re-entering 4.0% (best execution) territory, though with some improvements happening on Thursday some extremely qualified borrowers may have access to sub-4% rates depending on the lender and the applicant’s financial qualifications.
FHA mortgage loan rates have climbed out of a previously reported range (best execution) between 3.375% and 3.5% and into a new, higher best execution rate of 3.75%.
Remember, best execution rates are available in situations where a borrower has extremely good financial qualifications. The availability of a participating lender can also be a factor–your experience may vary depending on FICO scores, loan repayment history and other factors.
At the time of this writing, borrowers have been urged by many industry professionals to get a rate lock rather than float due to the steady upward pressure on rates. Some market watchers point to European economic developments as being responsible for some of the upward pressure, while others note that mortgage bonds are in a downward trend that can definitely affect mortgage loan rates.
It’s not clear what will happen going into next week; but the advice to get a rate lock rather than float into more uncertainty is likely good food for thought, especially for borrowers who have a lower risk tolerance and want to get an FHA mortgage rate that is still, best execution, below four percent. Could rates stay below the 4% range? That may depend on whether the current upward momentum fizzles out or continues into next week.
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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