February 15, 2017
In the short-term, mortgage rates have been on an upward swing. Tuesday’s rate activity had early higher moves, but with recovering later in the day, resulting in a continuation of the recent range of conventional rates but with more lenders reporting the higher part of that range.
30-year fixed rate conventional mortgages are, at the time of this writing, being reported at a best-execution range between 4.125% and 4.25%, but as mentioned above the more common rates are found at or near the upper end. FHA mortgage rates are holding at 3.75% but with the current short term upward trend, it’s not clear how long that best execution rate may persist.
FHA mortgage rates tend to vary more among participating lenders than their conventional counterparts. It’s best to shop around for the best rates and terms.
Best execution rates assume ideal conditions. Your FICO scores, loan repayment history, credit report and other financial qualifications will play an important part in determining your access to interest rates at or near the ones seen in this space. The rates are not available to all borrowers or from all lenders; your experience may vary.
Right now, there’s a trend for investors to seek safer markets-that’s activity that definitely affects mortgage rates over the short term. The Fed seems to be hinting at an interest rate hike sooner than later, which is putting upward pressure on rates based on investor reaction to those indicators.
Borrowers who aren’t sure about locking in a mortgage loan interest rate commitment with their lender or “floating” in homes that mortgage rates might fall before they do commit should be discussing this issue with the loan officer.
While some lenders are using the word “float” in some of their advice to borrowers who haven’t made the jump, they are also cautioning that floating is never without a degree of risk. That risk seems to be elevated in the current rate environment.
If you aren’t sure what the best course of action is for you, ask your lender about what could happen to your financial goals related to your home loan if you do wait, but rates increase rather than decrease. Set your “exit strategy” based on how high rates will climb before you feel it’s time to cut your losses and make the commitment. It’s tricky to float right now, but doing so with a strategy is a far better then if you choose to wait.
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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