December 16, 2015
Tuesday saw mortgage loan rates move higher–more lenders are offering interest rates for 30-year fixed rate conventional mortgages at 4.125% or higher (best execution).
Some are still offering sub-4.0% rates to extremely well-qualified borrowers according to our sources, but this varies depending on the lender.
FHA mortgage loan rates are, best-execution, at 3.75% for now, but after “Fed Day” on Wednesday when the Fed will finally end the speculation as to whether or not a December interest rate hike is happening, we could see that change depending on investor reaction to Wednesday’s scheduled Fed event.
As always, “best execution” assumes ideal credit qualifications for the applicant and much depends on the lender–these rates are not available to all borrowers or from all lenders. Your experience may vary.
The Fed interest rate hike issue is something that markets and investors have known could potentially happen for months, but there is still a high degree of potential volatility possible over this issue.
That is why many industry pros say it’s not safe to “float” and hold out on an interest rate lock commitment with your lender. The rewards, some say, aren’t justified compared to the risks.
Floating is never risk-free, but ahead of a major economic announcement like a possible interest rate hike, the potential for higher mortgage loan rates in its wake is much higher than normal. Rate increase could, depending on investor reaction, be a short term thing with corrections happening later, but in times like these it’s likely best to take the advice of a seasoned pro who watches these events unfold. Wednesday will be quite interesting.
Locking-committing to an interest rate in writing with your lender–is a choice only the borrower can make, but get as much advice as you can before choosing to float in the current environment.
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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