March 31, 2016
Mortgage rates have reclaimed some lost ground in the wake of a speech this week by Fed chair Janet Yellin. The Fed is still committed to “carefully” raising interest rates–a gradual increase as the U.S. economy continues to improve. The markets that affect mortgage rates has responded to this (among other factors) and we’re seeing mortgage rates starting to move lower accordingly.
30-year fixed rate mortgages were reported moving into a best execution range between 3.625% and 3.75%. FHA mortgage rates haven’t moved out from the comfort zone we’ve been discussing for some time so in spite of the conventional move we still see FHA mortgage rates at a best execution range between 3.25% and 3.5%. FHA rates vary more among lenders than their conventional equivalents so your experience may vary.
“Best execution” rates assume ideal conditions so borrower access to such rates is determined by FICO scores, loan repayment history and other financial qualifications. The rates listed here are not available to all borrowers or from all lenders. Your experience may vary.
Locking and floating are tough decisions in a rate environment that is low–compare the current rates with previously held 4.0% or higher territory and it’s easy to see why people tend to favor locking in rates at these levels. Floating may be riskier than usual going into Friday’s scheduled jobs report–the Employment Situation Report always has the potential to move rates in one direction or another based on investor reaction to the data.
Floating is never risk-free, but ahead of a scheduled economic data release it can be more so–it may be best to have a discussion with your loan officer before deciding to float into the employment report which is scheduled to come out Friday morning. Markets will have all day to react to the data but there are times when other breaking news can overshadow events like these and change the playing field for rates that day. Get some advice ahead of Friday if you’re unsure whether to commit to a mortgage loan interest rate with your lender soon or wait and hope that rates continue to improve.
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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