March 8, 2016
Monday saw mortgage rates moving higher, pushing rates closer to highs we haven’t seen since early in the year. 30-year fixed rate conventional mortgages are still reported in a best-execution zone around 3.75%. Some borrowers may have noticed Monday’s rate movement in the form of higher closing costs, but if the upward trend continues we could see conventional fixed rates break out into a range between 3.75% and 3.875%.
FHA mortgage rates are still reported in a range between 3.25% and 3.5%, but how long this remains isn’t clear. Upward pressure on rates could eventually push this range back into a single best-execution rate at the upper end of the current range.
As always, access to the best execution rates listed here depends greatly on the borrower’s financial qualifications. Your FICO scores, loan repayment history and other factors will determine your access to rates like these. Your experience may vary and the rates you see here aren’t available from all lenders or to all borrowers.
Borrowers who aren’t sure of their financial qualifications or how they may affect their access to the most competitive interest rates may wish to have a conversation with a housing counselor; call the FHA directly at their toll-free number 1-800 CALL FHA to be referred to a local HUD-approved housing counselor long before you have to make a decision about a lender or interest rate commitment. You can discuss these issues and more before proceeding with an FHA loan.
Bond market activity was reported as partly to blame for Monday’s upward movement. Some market watchers are saying short term, the trend is toward higher rates but the future isn’t as clear. It’s true that in spite of higher rates, the numbers themselves are still not terrible–some may remember last year’s four percent-plus ranges. The fact that mortgage rates are still below the four percent zone means locking and floating dilemmas at times like these have more to do with trying to get more mileage out of the recent short term downward trend and less to do with trying to “catch a break” on higher rate ranges.
In other words, borrowers who choose to lock at the current time aren’t really losing much even with the recent trends higher compared to last year’s four percent-and-higher ranges. Floating is never risk-free–choosing to hold off on an interest rate lock commitment with the lender means waiting out the whims of the market. If they move lower, choosing your moment to lock might not be as difficult as trying to wait out a sustained upward trend. Ask some advice of your lender and make the most informed decision you can.
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.
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