January 14, 2016
For the past five business days, we’ve seen mortgage rates moving lower than they’ve been in about eight weeks. Some industry professionals are calling it a rally. Whatever the label, we’re seeing mortgage loan rates moving to the (best execution) rock-bottom of the four percent range or lower depending on the lender.
30-year fixed rate conventional mortgages are, best execution, most aggressively offered just under the four percent range at the time of this writing, while FHA mortgage loan rates are still holding steady at a best execution 3.75%, though you will find greater variation among participating lenders than with conventional mortgage counterparts.
The causes for this rally include tough days for certain types of trading–to those not accustomed to watching mortgage rates it may seem like a contradiction that what is bad for the markets winds up being good for mortgage loan rates, but it is often true. Investor behavior can determine the direction of mortgage rates over the short term, and when times are tough economically overseas or at home, rates can improve.
The current rate environment has some market watchers saying now is a great time to make a mortgage rate commitment with a lender, but there’s also some advice floating around that borrowers with a higher “risk tolerance” could float, or avoid making that interest rate commitment in the short term, to see if the rally continues.
Floating is never without risk–there is always a chance that rates could move higher based on breaking news, the whims of the market, or other factors–so borrowers should ask for some advice of the lender before making a decision to float even in the best of times.
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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