March 30, 2017
Since our last mortgage rate report, the overall trend has been downward in the short-term. Over the past several business days we have seen rates see-saw back and forth within a certain range, but at the time of this writing, rates are lower than when we reported on them last.
30-year fixed rate mortgages are at 4.25%, best execution. That’s in the middle of the range we last reported, with 4.375% at the upper end and 4.125% at the lower end. FHA loans are finally seeing a mortgage rate range falling back into the sub-four percent range; depending on the lender FHA mortgage rate numbers are reported between 3.75% and 4.25% best execution.
Remember, “best execution” refers to rates offered to extremely well-qualified borrowers with outstanding FICO scores and other financial qualifications. Your credit score, repayment history and other factors will play a major part in determining your access to rates like the ones listed here. Best execution rates are not available to all borrowers or from all lenders. Your experience may vary.
Locking and floating in the current rate environment is tricky. There is still plenty of potential for volatility. Each day that passes with certain types of financial uncertainty thanks to a lack or perceived lack of clear economic policy, or worse yet, unresolved issues such as healthcare legislation that continue to make headlines without any resolution adds more potential for spikes and corrections in interest rates in the short term.
Floating, or holding off on a mortgage rate lock commitment in hopes that rates may improve, is never risk-free. In the current rate environment, the risks are elevated and borrowers should definitely talk their options over with the lender to get some expert advice on how to proceed. Locking, or making that interest rate commitment, protects the borrower from future rate spikes based on the terms of the agreement.
At present, if you lock (especially with an FHA mortgage loan) you avoid the ups and downs we’ve been seeing with rates. But those who have higher capacity to accept the risk that comes with floating may be tempted to see how far they can ride out the current trend. If you choose to do this, set a limit to how high rates might climb before you choose to commit.
Having that strategy in place ahead of time could spare you additional grief should rates begin an upward trajectory once more.
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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