January 18, 2017
Since our last report, the mortgage rate trend has swung back to improvements, taking back loses incurred last week and dropping hints that things could be settling into a new range. It’s still early days yet, but industry professionals are talking about these gains in association with weaker stock market performance, talk of European economic issues, and bond market activity.
If the current trend persists, we might see rates (best execution) at or near current levels, giving those inclined to float a better picture of where things could go if upward pressure resumes.
If you haven’t made a mortgage rate lock commitment with your loan officer, at present it might be easier to set your cut-off; if you decide to “float” until rates improve or cut your losses and lock if rates climb to a certain point, setting that point might be easier to do now than it was at the start of the holiday season.
30-year fixed rate conventional mortgages are at the time of this writing reported at or near a best-execution 4.125%. There may be some lenders who offer a higher best-execution rate, but according to our sources, 4.125% is easier to find. FHA mortgage loan rates are holding in their best execution 3.75% comfort zone and it may take a major shift up or down to push things out of that zone.
As always, the mortgage rate information you see here is listed as “best execution” which implies ideal conditions including an extremely well-qualified borrower with outstanding FICO scores and other financial qualifications. These rates are not available to all borrowers or from all lenders, and your experience may vary.
Back to the lock/float question, some advise locking within 15 days of closing in the current rate environment, while others may advise not floating at all currently if for no other reason than the fact that we’re still looking for more specific signs of an upward or downward trend.
As mentioned above, your tolerance for risk is what should determine your strategy in this area. If you can’t afford to take the chance, locking now could be the best move. If you are more comfortable with the risks of higher rates, floating is an option you should discuss with your loan officer first.
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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