September 27, 2016
Mortgage loan interest rates improved on Monday, the fourth business day in a row that rates have recovered. There was an upward trend for some time, but some market watchers and industry professionals are using the word “rally” to describe what they’ve been seeing lately.
There was considerable attention on the latest Fed statement about interest rates, but once “Fed day” came and went there was no significant change in investor activity-that is to say no increase activity unfavorable to interest rates in specific reaction to the Fed announcement.
30 year fixed rate conventional mortgage loan rates were reported at 3.375%, best execution, on Monday. That puts conventional loan rates in a single number rather than the range of best execution rates we saw previously.
FHA mortgage loan rates are holding for now at a best-execution 3.25%, which is also a breakout from the previously reported range between 3.0% and 3.25% (best execution) before the upward pressure began ahead of the Fed.
Best execution rates like those reported here assume ideal conditions-an extremely well-qualified borrower with outstanding FICO scores, loan repayment history, etc. The rates listed here are not available from all lenders or to all borrowers. Your experience may vary depending on your financial qualifications.
The week ahead has some economic data releases scheduled that may (or may not) affect mortgage rates depending on investor reaction to the data. Those releases include a consumer confidence report (Tuesday morning), a Durable Goods report, GDP, and Jobless Claims. Fed Chair Janet Yellin is scheduled to speak on Wednesday. Any time the Fed makes an announcement or the Fed Chair makes a speech, investor ears perk up (however briefly) so Wednesday might be a day to pay attention to just in case.
If you are not certain whether to lock or float at this stage, it’s a good idea to have a conversation with your loan officer. Some market watchers are more inclined to float at the time of this writing.
That may be because it seems that rates are in a recovery mode in the short term, but like all other things related to rates, investments, and money in general, the winds of fortune can change at any moment. Get some expert advice before choosing to float-an informed borrower is much happier with the results of his or her transaction.
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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