January 19, 2016
Ahead of the three-day weekend, Friday saw mortgage rates break some new ground–rates that, best execution, we havent’ seen in quite some time. Rates broke the four percent zone and began moving lower for both conventional and FHA mortgages.
How long this trend may last remains to be seen, but some sources report oil prices and stock market woes as being responsible for at least a chunk of the improvement in mortgage rates we are seeing at the time of this writing.
30-year fixed rate conventional mortgages left the four percent range altogether and headed into best execution territory at a range between 3.75% and 3.875%. On many days where there is improvement, FHA mortgage rates tend to lag behind and remain in a comfort zone (3.75% has been the FHA best execution comfort zone for a while now) those rates finally did break out of the zone and move into a best execution 3.5% which has not been seen in a long while.
For some borrowers this brings a “lock or float” dilemma. Rates are better now, best execution, than they have been in some time. Locking or committing to a mortgage rate with the lender makes plenty of sense when rates move decisively lower. But could they fall even further? That’s the question some are asking now and the answer is that nobody really knows.
Locking or floating is the borrower’s call. Floating or holding off on a mortgage rate in hopes that the rates will improve further is never without risk so the borrower should make an informed decision–but as some industry pros are saying at the moment, now is a great time to lock based on the rates available at the time of this writing.
Remember, best execution rates as quoted here are not available to all borrowers or from all lenders–your access to best execution rates depends greatly on your FICO scores and other financial qualifications. The availability of a participating lender willing to offer these rates may also be a factor. Your experience may vary.
Do you work in residential real estate? You should know about the free tool offered by FHA.com. It is designed especially for real estate websites; a widget that displays FHA loan limits for the counties serviced by those sites. It is simple to spend a few seconds customizing the state, counties, and widget size for the tool; you can copy the code and paste it into your website with ease. Get yours today:
http://www.fha.com/fha_loan_limits_widget
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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