February 9, 2017
There are factors that directly affect mortgage loan interest rates, and there are those that work more indirectly. Economic data, breaking news, and sometimes even the overall mood of investors on a given day or in a given week could be factors in which way rates are moving.
Right now, investors seem very keen on putting money into less risky avenues (such as bonds), and that is one thing that is helping rates improve this week. We’ve seen an overall downward trend in the last few business days that has resulted in 30-year fixed rate conventional mortgages creeping back towards the bottom part of the range we’ve seen rates hover in since the start of 2017.
At the time of this writing, 30-year fixed rate conventional mortgages are at or near a best execution 4.125%. Our sources say some lenders are still offering 4.25%, but the lower best execution rate is easier to find as the improvements continue.
FHA mortgage loan interest rates are still at 3.75% best execution, though you may need to shop around to find the most competitive rates. (FHA rates tend to vary more among participating lenders.)
As always, the rates listed here are reported as best execution rates which assume an ideal situation including a borrower with outstanding FICO scores. Your financial qualifications will play a major role in determining your ability to access rates like these. Your experience may vary.
It is far too early to label this anything other than a short-term trend that is being pushed by investor behavior in the wake of last week’s economic data releases, further news this week, and speculation where the economy might be headed. Short term trends can be borrower-friendly, but it doesn’t pay to assume whatever current conditions are today shall continue.
Those unsure about locking in a loan rate commitment with the lender, or floating in hopes of more improvement should understand that this week’s improvements could be entirely gone in a day, next week, or a month. The most important thing to do is to establish your “risk tolerance” and if you choose to float, decide how high rates might climb before you cut your losses and make the commitment.
Have a conversation with your loan officer if you aren’t sure which way to go with regard to locking or floating.
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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