March 2, 2016
Mortgage loan interest rates were sideways to slightly higher to end last week, and on Monday things kicked off with rates pushing slightly lower. But on Tuesday rates took a turn upward, pushing some closing costs higher but also breaking conventional loans out of their previous single-number best execution rate and into a new range.
30-year fixed rate conventional mortgages were reported in a best-execution range between 3.625% and 3.75%. If the upward trend persists that range could disappear in favor of a more solid 3.75%, but for now your experience may vary more among conventional lenders depending on your financial qualifications.
FHA mortgage loan interest rates are still holding in a best-execution range between 3.25% and 3.5%, though that range also could be affected by more upward movement this week if it occurs. FHA mortgage rates tend to vary more among lenders than conventional rates so your experience may vary here as well. Remember, best execution rates assume ideal conditions including outstanding FICO scores and loan repayment history. Best execution rates are not available to all borrowers or from all lenders.
Locking and floating advice is mixed. Some industry professionals believe another drop in rates is coming, and advise those who are not yet in a mortgage rate commitment with the lender to hold out for the next one.
But on Monday the advice on locking basically sounded like common sense–the advice from some was “rates are low, there’s nothing wrong with taking the plunge”. There isn’t a huge amount of volatility present in the short term rate behavior we’ve seen in the last few days, but things can change quickly depending on market forces, breaking news, and other factors.
So it essentially boils down to how much risk you are willing to put up with in the meantime. Floating is never risk-free as breaking news or scheduled economic data releases always have the opportunity (depending on investor reaction to that information) to push rates one way or the other. Ask your loan officer for some advice and make the most informed choice you possibly can. There are still some scheduled economic data releases this week that could push things one way or the other, so it’s not safe to just assume things will simply carry on as they are currently.
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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