October 19, 2016
Interest rates for mortgage loans improved in a small way for the second day after a prolonged “losing streak” that managed to push conventional loans out of a a previous range and into a single, higher number and FHA mortgage loan interest rates out of their single-number best execution territory.
30-year fixed rate conventional mortgages are, best execution, at or near 3.625%, with their previous range being (depending on the lender) between 3.5% and 3.625%. FHA mortgage loan rates are now in a range between 3.25% and 3.5% best execution at the time of this writing.
Best execution rates listed here assume ideal conditions including an extremely well-qualified borrower with outstanding FICO scores and loan repayment/credit history. Your experience may vary, and best execution rates are not available to all borrowers or from all lenders.
Even though we’ve seen two days of small recovery in the rates, it’s not safe to call an end to the upward momentum. Rates have taken a breather from their upward climb, it’s true, but there are still scheduled economic data release, breaking news, and other factors that could easily push rates in one direction or another depending on investor reaction to that news.
Many industry professionals are keeping a close watch on Thursday’s European Central Bank (ECB) announcement, which could affect rates depending on the contents of that announcement. ECB events have affected rates in the past, but since the Brexit drama the stakes have been higher, so don’t be surprised to see more attention paid to events like this.
Locking or floating in a rate environment like this is tricky. There’s no way to tell until we actually see what happens on Thursday; will rates slide lower or bounce even higher?
There’s plenty of potential in both directions, and floating is never risk-free. Borrowers who have low risk tolerance will likely be advised by their loan officers to lock before things move higher, but for those who can accept the risk, floating or locking in an interest rate commitment on an FHA or conventional mortgage loan is a tougher decision.
It’s best to ask your lender for some advice before taking the risk, an informed borrower will be happier with the outcome.
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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