September 17, 2015
Thursday is a very important day for mortgage rates, thanks to the much anticipated Fed announcement later today that could bring news of an interest rate hike…or not.
That announcement, at the time of this writing, has not happened so we await the news from the Fed and will write a post about the announcement and its effect on the mortgage loan interest rate environment–look for that update on Friday morning.
On Wednesday mortgage loan rates held steady, which was not the case on Tuesday as nervous investors made choices in the markets that directly affect mortgage loan rates that sent those rates higher.
But for now, at the time of this writing, 30-year fixed rate conventional mortgage loan interest rates held steady (best execution) at or near 4.0%. FHA rates remain in the 3.75% comfort zone (again, best execution).
Thursday is a day of great potential volatility. The outcome of the Fed announcement has the power to shift rates higher or lower in dramatic fashion depending on investor reaction to the announcement. You won’t find much advice using the word “float” going into the Fed announcement–those who were undecided about locking or floating got an earful this week about the enhanced risk of floating.
Some look at this increased risk and view the situation as having the potential for an equally big reward. That’s the borrower’s choice, of course, and much depends on what many industry folks call “risk tolerance”. If you choose to roll the dice and float into the Fed announcement, you’ll want to keep your eyes on the news to see how investors react to it and what that reaction is like over the entire course of the remaining trading day.
Floating–holding off on a mortgage loan interest rate lock agreement with the lender in hopes of a better rate coming along in the short term–is never risk-free and is a choice only the borrower can make. Ask your lender for some advice when considering your options.
Do you work in residential real estate? You should know about the free tool offered by FHA.com. It’s designed especially for real estate websites–a widget that displays FHA loan limits for the counties serviced by those websites.
It is easy 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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