August 17, 2016
Mortgage loan interest rates are experiencing another week of ups and downs; on Tuesday rates were unchanged to slightly higher depending on the lender, and all eyes are on Wednesday’s Fed meeting minutes release.
This has serious potential to move rates in one direction or the other depending on investor reaction to the contents of those minutes. Most of the current drama in this department has to do with the timing of any proposed Fed interest rate hike or the lack of an indication of same. The potential for another interest rate hike by the Fed creates volatility in the markets that affect mortgage loan rates, so the uncertainty here is a big X factor this week.
On Tuesday, 30-year fixed rate mortgages were reported at a best execution 3.5%. Some borrowers who experienced slightly higher rates may see that increase reflected in closing costs rather than actual higher mortgage loan interest rates. FHA mortgage loan rates are holding in their 3.25% best execution comfort zone.
As always, the numbers you see here are presented as best execution rates, which assume ideal conditions such as outstanding FICO scores and loan repayment history. Your experience may vary depending on your financial qualifications; these rates are not available to all borrowers or from all lenders.
Wednesday’s Fed minutes release is the big event; borrowers, lenders, and market watchers will all be watching the headlines on Wednesday afternoon to see what fallout, if any, might happen as a result of that scheduled release.
Borrowers who are on the fence about locking in a mortgage loan interest rate commitment this week a (or floating in hopes that rates will go lower) should have a conversation with their loan officer to get some sound advice on how to proceed. Floating is never without risk, but weeks like these can carry elevated risk due to the uncertainty around scheduled events like the Fed meeting minutes release.
For those who choose to take the risk, having a good float strategy (determining in advance how high rates might go before you cut your losses and commit, for example) is an excellent idea.
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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