March 18, 2016
Thursday saw a decisive move lower for interest rates. After many days of upward movement, and some recovery earlier in the week following a Fed announcement (one that had no talk of another rate hike for now) it seems that rates are headed back down. This trend is being described by some market watchers as a delayed reaction to the Fed–are some lenders slower to update their mortgage loan interest rates due to recent volatility in the market? That’s what some are thinking.
30-year fixed rate conventional mortgages are now operating in a best execution range between 3.625% and 3.875%. That is a wider range than previously reported, though you will find variation among conventional lenders and your access to these rates depends greatly on your financial qualifications. (“Best execution rates” refer to those offered applicants with outstanding FICO scores, loan repayment history, etc. These rates are not available to all borrowers or from all lenders.)
FHA mortgage loan rates remain in their best execution comfort zone between 3.25% and 3.5%. This is not uncommon–best execution rates for FHA mortgages often hold steady as conventional numbers vary more in smaller increments.
When there is a dramatic shift in rates, FHA mortgage loan best execution rates will follow suit sooner or later, but even at present you will find more variation among the rates offered by participating FHA lenders. That’s also common–your experience depends on the lender, your FICO scores, etc.
There is some cautious advice among industry pros about floating–if you aren’t within 30 days of closing, some say it could be in your interest to float rather than lock in an interest rate commitment in the short term, but only if you have what some call a measure of risk tolerance. That means knowing how high rates will go before you choose to cut your losses and lock with the lender.
Floating is never without risk, so it’s important to know your boundaries if you are choose to float for now. Ask some advice of your lender before deciding. Rates, in spite of recent moves higher, are still considered in a good place, so there is nothing wrong with taking advantage of sub-four percent best execution interest rates if you feel more comfortable locking instead.
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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