February 7, 2017
Mortgage rates took a move lower on Monday to levels many have been hoping to see more of in the last two weeks. Though the move does not dramatically change mortgage loan interest rate numbers, could we be on the start of a short-term trend due to global economic uncertainty?
Some of our sources seem to think that at the very least, today’s downward movement was inspired by investors seeking safer havens, with mortgage rates reaping the benefit of their investment activity.
30-year fixed rate conventional mortgages are now reported in a best-execution range between 4.125% and 4.25%. Affected borrowers may notice the changes reflected in closing costs rather than an actual rate adjustment. FHA mortgage rates continue in their best execution comfort zone at 3.75%. FHA rates often take longer to catch up to the adjustments of conventional rates; it’s not uncommon for conventional mortgage rates (best execution) fluctuate more than FHA rates.
However, FHA rates tend to vary more from lender to lender, so it’s good to compare lenders and try for the most competitive offering you can get.
The rates listed here are “best execution rates”, something we mention frequently as a reminder that not all borrowers have access to them. Your FICO scores, loan repayment history and other financial qualifiers will help determine your access to rates like the ones listed here. They are not offered to all borrowers or from all lenders. Your experience may vary.
Some market watchers are on record saying that Monday’s lower rates could be very short-term and that it is not safe to assume that lower rates are on the horizon outside the short term movements we’re seeing lately. In general, compared to 2016, we’re in a higher range of rates, and that may not go away any time soon.
Markets, including the ones that influence mortgage rates, hate uncertainty. Investors will react in sometimes unpredictable ways to breaking economic news, scheduled economic data releases, and Fed announcements. Sometimes investors will ignore traditionally quite influential economic reports in favor of unexpected headlines elsewhere. In the current rate environment, your “lock or float” risk versus reward equation may tilt in a different direction depending on these factors.
It’s never a bad idea to discuss your lock/float needs with your loan officer to see what expert advice may be applicable. Make the most informed choice you can before deciding to enter a mortgage rate lock or hold off (“floating”) in hopes of a lower rate.
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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