October 9, 2015
It’s been a harder week for rates–last week we saw improvement on a daily or near-daily basis. This week, the opposite was true.
On Thursday rates climbed higher, pushing 30-year fixed rate conventional mortgage loan interest rates out of their previous best-execution range (between 3.75% and 3.875%, depending on the lender and other factors) into a single, higher rate (3.875% best execution).
FHA mortgage rates are still being reported at a best execution 3.5%, though if the upward trend persists, we’ll likely see that break out into a range of rates with 3.5% at the bottom end. If upward pressure continues over the short term, that range could consolidate into a higher best-execution rate.
FHA rates have in the past tended to find a “comfort zone” and remain there, but it’s important to point out that FHA mortgage loan rates tend to vary more among participating lenders.
And as always, the rates you see listed here assume ideal conditions–a well qualified borrower with outstanding FICO scores and other financial qualifications. The rates seen here are not available to all borrowers or from all lenders. Your experience may vary.
Why have rates been moving higher? A variety of reasons, but Thursday’s upward movement was caused at least in part by bond market issues, according to our sources. Stock market rates moved higher and bonds had troubles. These are the ups and downs of the market–will those ups and downs continue to put upward pressure on mortgage loan rates next week?
Some industry pros are urging borrowers to lock over the short term as what we’re mentioning here is not the only factor that could affect rates–economic data releases, breaking news, or other factors could also conspire to add more pressure, pushing rates higher.
Floating–holding off on a mortgage rate lock agreement with the lender in hopes that rates will move lower over the short or mid-term–is never without a degree of risk, but it seems riskier at present to float. The choice is up to the borrower, but it’s always a good idea to ask some advice of your lender if you aren’t sure whether to lock or float.
Do you work in residential real estate? You should know about the free tool offered by FHA.com–a widget designed especially for real estate websites widget that displays FHA loan limits for the counties serviced by those sites.
All you need to do is 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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