December 8, 2016
Mortgage rate numbers have fallen a bit since our last report. The current upward trend has seen some corrections, but Wednesday’s lower rates are inspired by overseas economic developments. Specifically, the European Central Bank(ECB) is set to make an important announcement about tapering-an issue that was a major spoiler in mortgage loan interest rates at home in years past.
The ECB announcement has no direct connection to the daily FHA or conventional mortgage rate, but investor behavior often does, and that’s what happened on Wednesday. Investors are placing their money where they anticipate it will do the most good depending on whether the investor believes tapering will happen soon or not. The details of those investment strategies are unimportant for our purposes here; suffice it to say that investor behavior helped push rates down ahead of the ECB event.
That puts 30-year fixed rate conventional mortgages in a range of best execution rates between 4.125% and 4.25%. Affected borrowers may notice alterations in closing costs rather than actual rates.
FHA mortgage loan interest rates are holding right at the bottom of the four percent range. 4.0% is the number we keep seeing, best execution, for now. That could break out into a range of rates with 4.0% being the upper end if improvement continues. The breakout could run in the opposite direction if there’s a dramatic shift in rates or sustained upward movement in the short term.
As always, “best execution” for FHA mortgage rates and conventional rates alike assumes an ideal borrower with excellent FICO scores and loan repayment history. The rates listed here are not available to all borrowers or from all lenders. Your experience may vary.
Industry pro advice is still featuring the word “lock”. There’s no solid proof that the upward trend we’ve seen in the last few weeks is over, so if you are undecided about your locking or floating options, it’s best to discuss your concerns with your loan officer for some good advice.
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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