November 30, 2015
Thursday was Thanksgiving, and with banks closed and the markets also not doing business, it was a short week. Mortgage loan rates stayed absolutely quiet on Friday, no surprise there as all eyes were on the Black Friday shopping news and other developments.
But the coming week has some important scheduled economic data releases including jobless claims and the employment situation report. Factory orders is also a report due out this week–lots of potential indicators as to where the economy is heading (or is currently at) and that will no doubt fuel speculation about the Fed’s decisions about a possible December rate hike.
In short, there is potential for volatility this week that borrowers on the fence about locking or floating should consider while making the choice. Floating could get riskier the farther into the week we go.
Locking and floating are decisions only the borrower can make, but it’s crucial in times like these to ask advice from your lender. Depending on who you ask, you may be advised to lock this week (especially if your closing date is near) or you could be told that floating might be acceptable in the mid-term.
But with the Fed still considering that December interest rate hike, the closer we get to the Fed announcement the higher the potential for upward momentum in the rates gets.
Investor reaction to the situation is one potential cause of volatility here, another is the potential for influential breaking news combined with an already volatile rate environment that could have short term consequences. Borrowers should consider all these things ahead of the lock/float decision. Your tolerance of the risks involved with floating will inform–or should inform–your decision.
At the time of this writing, 30-year fixed rate conventional mortgages are holding between 4.0% and 4.125% best execution. FHA mortgage loan rate are, best execution, in a comfort zone at 3.75%. FHA rates tend to vary more among participating lenders. The rates you see here are not available to all borrowers or from all lenders–your experience may vary depending on your FICO scores and other financial qualifications.
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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