May 9, 2017
Since our last report, mortgage loan rates have crept slightly higher and there are indications that we could see conditions favorable for that to continue depending on investor reaction to things like breaking news from other parts of the world, bond market activity, etc.
What is bad for the economy is often good for mortgage loan interest rates, and vice versa. Recent developments such as the French election and the release of the most recent U.S employment data have brought good news. Mortgage rates have crept higher within the range we’ve gotten accustomed to seeing, so many affected borrowers may notice the difference in closing costs rather than actual higher rates.
30-year fixed rate conventional mortgages are still operating at a best execution range at or near between 4.0% and 4.125%. The fact that we’re seeing numbers back to the lowest of the four percent range is welcome, but how long it can maintain in the current environment remains to be seen.
FHA mortgage rates are still below the four percent line, holding in a best-execution range between 3.5% and 3.75% depending on the lender. FHA rates may vary more among participating lenders than their conventional counterparts so it is a very good idea to shop for the most advantageous rates and terms.
Remember, the rates you see here are listed as best execution rates, which assume ideal conditions such as a well-qualified borrower. Your FICO scores and other financial qualifications will play an important part in determining the rates you qualify for. The rates seen here are not available to all borrowers or from all lenders. Your experience may vary.
Industry professionals don’t seem to be keen on floating for those who are about a month away from closing. There is always a risk associated with holding off on making the mortgage loan interest rate lock with your lender in hopes that rates might go lower. In the short term we seem to be in a rate environment that favors moving higher, based on a look at the previously mentioned headlines from France, bond market activity, etc. There is, according to market watchers, an elevated risk of rates creeping higher in the short term.
Borrowers who are unsure whether to lock or float right now should take that into consideration when making the decision. A chat with your loan officer is also never a bad idea-get some expert advice and make the most informed decision you can.
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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