June 14, 2016
At the time of this writing, the end of the market day (Tuesday June 14) hasn’t happened yet. But the news about mortgage loan interest rates–even without the most current end-of-day interest rate data–is definitely encouraging for anyone considering a home loan at the present.
Rates have fallen to lows not seen in quite some time. 30-year fixed rate mortgage loan interest rates (best execution) were reported at the end of the business day on Monday at a range between 3.625% at the upper end of the range and an FHA loan-challenging 3.5% at the lower end of the range. Some are saying these are the lowest we’ve seen rates in several years, while others are using the phrase “close to all-time lows” to describe what is being seen, best execution.
Where are FHA mortgage loan rates going in all this? They are at the time of this writing still within the long-reported range between 3.25% and 3.5%. It’s that often that we see conventional best execution rates falling into FHA best execution territory, and it’s unclear how long rates might continue to improve or how long the current FHA rates might persist before the improvement pushes a change in the numbers.
As we always point out, “best execution” rates seen here aren’t available to all borrowers or from all lenders. Your access to the rates seen here depends greatly on your FICO scores, loan repayment history and other financial qualifications. Your experience may vary. FHA mortgage loan rates tend to vary more among participating lenders, so that is also a consideration.
There is a temptation for some who aren’t committed to a mortgage rate lock yet to “float” in hopes that rates might go even lower. There is some talk of this among industry professionals (some believe floating is still a viable strategy even though rates are incredibly low at the time of this writing) but others caution that the flip side to what we are seeing now could possibly include a scenario where rates bounce higher, and move higher faster than they fell.
So while it seems that in the short term conditions might be favorable to hold off and see what happens in the next day or so, the risks are also worth considering. If you are thinking of floating, it’s always wise to consider your risk tolerance and how high the rates might go before you cut your losses and commit. But locking a rate now at levels described as “best in three years” or nearly so can’t possibly seem like a bad idea for those who have a very low risk tolerance. The choice is the borrower’s, but it pays to have a conversation with the lender for an informed opinion if you are on the fence.
We’ll likely be covering mortgage loan interest rate trends with greater frequency this week given that rates are so low and that any change might be considered newsworthy–sharply higher, or moving even lower, which will happen? Continue to watch with us.
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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