October 23, 2017

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Mortgage Rate Trends: Higher

Mortgage Loan Rate TrendsMortgage loan interest rates went higher on Friday, undoing some of the gains made earlier in the week but keeping things within the range we’ve been looking at since the start of 2017.

The move higher wasn’t enough to push many lenders away from their earlier offerings; affected borrowers likely saw the results of Friday’s move reflected in closing costs in some markets, where actual changes to the rate may have occurred with some lenders.

30-year fixed rate conventional mortgages were reported in a range between 4.125% and 4.25% on Friday (best execution). FHA mortgage rates remain in their 3.75% comfort zone.

The ups and downs, give-and-take activity of recent weeks isn’t really enough to push FHA mortgage rates out of that zone without either a day’s worth of dramatic movement or sustained up or downhill momentum of a period of days. FHA rates also tend to vary more among participating lenders, so the best execution numbers you see here may not be the specific rate quoted.

“Best execution” rates quoted here assume ideal conditions including a highly qualified borrower. Your ability to access rates like the ones seen here depends on your financial qualifications. The rates listed here are not available to all borrowers or from all lenders. Your experience may vary.

The locking or floating issue doesn’t seem to be as tricky as of late (barring the timing of economic data releases that have historically had the power to affect rates in ways that could complicate a borrower’s plans to float), and this week there are only a small number of scheduled events to contend with (the “JOLTS” report, and a consumer sentiment report.

But there are bond auctions scheduled for three days mid-week, and that could affect rates depending on investor behavior.

If you are unclear on locking versus floating, ask your lender for advice. Floating is the practice of holding out on a mortgage rate lock commitment with your lender in hopes that mortgage loan interest rates will go lower before you do. Borrowers who float never do so without a certain amount of risk; the key is to decide how high the rates might go before you cut your losses and make the commitment.

In times where the risks are higher due to important scheduled economic data release, or with rate behavior in general, floating can be tricky. Your lender will give you some important perspective on this based on current trends and anticipation of what might happen next. It pays to make the most informed choice you can in this area-talk it over with your loan officer for best results.

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FHANewsBlog.com was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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