September 15, 2015
Monday kicked off a wait-and-see week with rates holding steady ahead of Thursday’s Federal Open Market Committee’s announcement with regard to a possible hike in interest rates.
In years past, this type of FOMC announcement has had great power to move rates, and there is “no consensus among economists” according to a recent Business Insider article as to whether or not the rate hike will be announced this week.
So markets are playing the waiting game, and that means, at least on Monday, that mortgage loan rates were in what some might categorize as “defensive mode”. Rates don’t seem to be budging, and that means that best-execution, we see reports of 30-year fixed rate conventional mortgage loan interest rates hovering at or near 4.0%.
FHA mortgage loan rates are still in their long-reported comfort zone of 3.75%, best execution. You may see greater variance in this rate among participating lenders, and as always, “best execution” refers to a situation where borrowers with ideal circumstances (outstanding FICO score, etc.) are assumed. These rates are not available to all borrowers, nor are they available from all lenders. Your experience may vary.
The going advice from industry pros includes the word “lock” with warnings that floating this week carries a highly elevated risk. Make the most informed choice you can about floating or locking, but this is one week where many industry professionals are advising borrowers to take a great deal more caution.
It is very possible that rates will hover where they are at now until the Fed announcement on Thursday unless breaking news or some other development causes investors to react.
That can and has happened in the past, but floating this week should be generally viewed as a higher risk based on the advice from our sources.
Do you work in residential real estate? You should know about the free tool offered by FHA.com. It’s designed especially for real estate websites–a widget that displays FHA loan limits for the counties serviced by those websites.
It is easy 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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