March 6, 2017
Mortgage loan rates have been rising in small increments for the last five business days-Friday’s move upward was small but is still part of that overall upward trends. The Fed is likely to announce an interest rate hike at their meeting on the 15th, which won’t help the mortgage rate environment, but by the time that hike is announced rates are likely to already reflect any negative consequences (on mortgage rates).
What is good news for the economy is often bad news for mortgage loan interest rates. The Fed raising rates is an indicator that the economy is stronger, and investor reaction to that climate can and often does have a negative effect on mortgage rates.
At the time of this writing, 30-year fixed rate conventional mortgages are reported at a best execution 4.25%, and FHA mortgage rates holding within their best execution range between 3.75% and 4.25%.
FHA rates tend to vary more among participating lenders so it’s best to shop around for the best rate. As always, the rates seen here are not available to all borrowers or from all lenders. Your access to best execution rates depends greatly on your FICO scores and other financial qualifications. Your experience may vary.
Borrowers who have not yet made a mortgage loan interest rate lock commitment with their lender should know that this week has a couple of key economic data release events including the European Central Bank meeting on Thursday and the Employment Situation Report on Friday.
Depending on investor reaction to news from these two events we could see rates continue to climb. Now is a tricky time to “float”, or hold off on making that rate lock commitment.
Floating is never risk-free, but in an environment such as the one we’re in now, the risks are elevated. It’s best to set a limit for how high rates will go before you “pull the trigger” and commit to the rate lock-that allows you to get some damage control if you are determined to try to ride out the current upward trend.
Many industry professionals are more interested in being defensive at the moment, and you would do well to discuss any plans to float with your loan officer.
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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