January 28, 2016
Wednesday was a potentially big day for mortgage loan rates–the Fed issued a scheduled announcement that had plenty of eyes on it even though it would seem unlikely for any major news to come from that direction since the Fed announced a hike in mortgage rates at the end of last year.
But investor reaction is a funny thing, so there was plenty of attention on the Fed, seemingly “just in case”. Rates were trending a bit higher in the morning according to our sources, but after the Fed announcement we saw rates headed right back to yesterday’s territory.
That means 30-year fixed rate conventional mortgages ended the day, best execution, at a range between 3.75% and 3.875%. FHA mortgage loan rates remain in the best execution comfort zone of 3.5%. Best execution rates are not available to all borrowers or from all lenders–your experience may vary depending on your financial qualifications, FICO scores, etc.
Lock/float advice at this point in time? Advice on locking seems to be sound–some industry professionals say there’s nothing wrong with committing to a mortgage rate when rates are at lows we haven’t seen in some time–with conventional rates below four percent, holding out for an even better rate seems to be quite optimistic in a time where volatility could be a factor that pushes rates higher unexpectedly depending on breaking news, world events, etc.
Floating is never without a degree of risk–if you choose to hold out for a better rate in the short term, be sure to discuss that decision with your lender to see what he or she might say based on the benefit of experience with the ups and downs of the market.
Global market woes, oil prices, and the investor reaction to news about those issues can and may play a role in which direction rates head…and there’s always domestic economic data to push things one way or the other also. Discuss locking or floating with your lender to see which option makes more sense at present.
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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