October 17, 2016
In our last report, we noted that mortgage loan rates had made some improvement, but the very next day we saw rates bouncing to highs not seen in several months-a move that not only affected conventional mortgages, but also served to push FHA mortgage loan interest rates out of their long-held comfort zone and into a new range.
Some market watchers noted that the move higher didn’t begin until later in the day on Friday, which could have resulted in some lenders failing to change or “reprice” on that day. Depending on how things go on Monday, that could mean higher numbers for some lenders who didn’t reprice already.
That means those contemplating their options when it comes to locking in a mortgage loan interest rate commitment with their lender or “floating” or holding off on that commitment in hopes of a better rate could be taking a bigger chance than usual.
The talk among some industry professionals is that we may be looking at an upward trend, so those who are unsure whether or not to float should have a talk with their loan officer and make an “exit strategy” to commit at a certain point-how high will rates go before you lock? That’s the question those interested in floating will have to answer. Floating is never without risk, but the risks are higher for now.
And what did those Friday numbers look like? At the end of the day, 30-year fixed rate conventional mortgage loan rates were reported at or near a best execution 3.625%, with today’s changes likely being reflected in closing costs rather than the actual rate. That’s a change from the last report where we saw a range between 3.5% and 3.625%, best execution.
But it was FHA mortgage loans that showed the most noticeable change, moving into a best execution range between 3.25% and 3.5%. The previous report had FHA rates holding in their comfort zone of 3.25% at the time of this writing. What the coming week brings is difficult to say, but how long the current range persists depends a lot on how much additional upward pressure on rates happens in the coming days.
As always the rates you see here are reported as best execution rates, which are not available to all borrowers or from all lenders. Your financial qualifications will play an important role in your access to rates like these, and your experience may vary.
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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