June 23, 2016
Mortgage loan interest rates are moving higher. On Wednesday afternoon it was the fourth straight day of higher movement for rates, and depending on investor reaction to the Brexit referendum in Britain on Thursday we could be in for a continued upward trend.
The Brexit referendum naturally does not have any direct effect on mortgage loan rates, but how investors react to this overseas economic news can and likely will push rates in one direction or another.
There is also the possibility (however remote) that other breaking news or economic data could take attention away from Brexit drama. It’s something that has happened before, but could it happen with such a major event as the Brexit decision?
In any case, there are some industry pros who are convinced that rates will continue to move higher and that we might see the strongest indications of that move on Friday. What happens remains to be seen, but keeping that concept in mind when choosing a lock/float strategy is a good idea.
Wednesday, 30-year fixed rate conventional mortgages were reported at a best execution 3.625%, though there were some lenders still offering 3.5%, according to our sources. FHA mortgage rates are still being reported between 3.25% and 3.5%, a best execution comfort zone we’ve seen for quite some time.
FHA rates tend to vary more among participating lenders, but in any case, the best execution rates you see reported here are not available to all borrowers or from all lenders. Your experience may vary, and your access to these rates depends greatly on your FICO scores and other financial qualifications.
Industry pro advice on locking and floating ahead of the Brexit referendum? There seems to be plenty of agreement that floating in the short term carries an elevated degree of risk. Choose carefully-the Brexit vote could act as a spoiler for mortgage loan rates but much depends on the outcome of the vote, and how investors react to it.
Many news sources report the “stay” or “go” sentiment for voters trying to decide Britian’s membership in the EU is sharply divided and may be too close to call until the votes are actually tallied.
That can make for a volatile environment for mortgage rates, so it’s best to get some sound advice before choosing to float over the next couple of days.
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.
Browse by Date: