February 9, 2016
Monday saw mortgage loan rates moving lower–some sources are labeling it the “lowest in a year”, and industry pros are urging borrowers who are undecided to lock in a mortgage rate commitment with the lender due to this move.
At the time of this writing, 30-year fixed rate conventional mortgages are in a best execution range with 3.625% at the low end–more lenders are reported as offering this best execution rate than those offering the same or similar on Friday.
FHA mortgage loan rates are reported at a best execution rate of 3.5% depending on the lender, but if the downward trend continues we’ll likely see this comfort zone change. It’s entirely possible that the new, lower rate won’t last long unless the downward trend persists.
As always, the rates quoted here are best execution rates and aren’t available from all lenders or to all borrowers. Your FICO scores, loan repayment history and other financial qualifications determine your access to best execution rates. Your experience may vary.
The lock-or-float question at this point depends on how much risk a borrower is willing to endure. Some industry pros are calling the current move downward a trend now, but there are many variables that could change that trend including economic data releases, breaking news, and the whims of the market.
The risk of a “bounce” is always present when rates begin to fall sharply–a market correction or other upward move could be a bump in the road if/when it happens, but there’s always a chance that other forces may conspire to put upward pressure on rates also.
The bottom line is that it’s important to asses the risk, decide if now is the time to commit (given that rates are at near one-year lows at present) and have a talk with your lender. It never hurts to get his or her advice before deciding.
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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