September 23, 2019
If you have been following mortgage loan interest rate trends recently, you know that FHA mortgage loan rates have been at historic lows and that last week there was a fairly significant market correction to rates.
Fast forward to the end of last week and we see what some finance blogs are describing as a “correction to the correction”; FHA mortgage loan rates (best execution) were reported down from 3.5% to a best execution 3.375%.
And for those who already have home loans, the temptation to refinance at the current time to take advantage of mortgage loan interest rates is strong; who wouldn’t want to save more money on their monthly payments or take equity out of the home in cash?
Refinancing to make upgrades and improvements to a home is also possible with an FHA mortgage, but none of the transactions we’ve described so far require you to have an existing FHA mortgage–you can refinance a non-FHA mortgage if you are financially qualified.
A Good Question To Ask A Lender
Are you thinking of a mortgage loan to take advantage of the recent current rates? As we head into October many finance writers are convinced we will see some sort of significant change in mortgage rates but no one seems prepared to commit to saying which way rates will swing.
With that in mind, it is a very good idea to pull a free copy of your credit report, learn your FICO scores, and present what you to know to a loan officer with a question:
How close can you get to the best execution interest rate advertised today with the credit scores in your current report? Should you realistically expect the most competitive rate? And if not, what rates should you expect to be offered?
You may or may not get a direct answer–after all, until you actually apply for the loan, your credit scores remain important, but where interest rates are concerned, the scores you come to the bargaining table with at application time are the most important ones.
A lender may not be willing to commit to a specific number, but at least try to get a hypothetical to see where you are at in the home buying process; “needs work” credit-wise, or not.
Remember that your FICO scores will play an important part in the interest rate you are offered, but FICO scores also help establish your eligibility for the lowest possible down payment, so it’s vital to work on your credit long in advance of your loan.
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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