May 20, 2015
Six days ago, mortgage loan interest rates caught a break, moving lower to end the week. But this week that small breather didn’t stop an upward trend that resumed once more–rates moved higher on Monday and Tuesday, with 30-year fixed rate conventional mortgages mixed–some lenders offered a best-execution rate as low as 3.875%, with more offering best execution rates at 4.0%, and a smaller number reported going up above 4.0%, best execution.
FHA mortgage loan rates have found a comfort zone at 3.75% best execution. FHA rates may vary more among participating lenders than their conventional counterparts, so it’s good to shop around for the most competitive rates. When we use the phrase “best execution” we mean FHA lenders offering the rates mentioned here to extremely well qualified borrowers with outstanding FICO scores and loan repayment history. Your experience may vary depending on a variety of factors including the availability of a participating lender and your financial qualifications.
Wednesday was a much anticipated day with the Fed making a scheduled policy announcement; this announcement could have included a decision to hike interest rates. That never came–a rate hike seems to be off the table, at least for now. (There’s no guarantee the Fed won’t revisit this issue, keep your eyes on the news for talk of developments in that area.) Today the rates hardly moved in spite of the Fed announcement; under different conditions the Fed event today could have caused a downward movement in mortgage loan interest rates.
There is a great deal of potential for volatility, and it’s not sure whether the recent upward trend in home loan interest rates is a short term reaction to European economic news and other factors or a more long term upward trajectory influenced by the same. Some industry professionals are urging their clients to get an interest rate lock and not to float, or to float in the very short term only. That’s advice only the borrower can decide to take or ignore; it’s best to get some expert advice about current market conditions before choosing to float in the current rate climate.
Do you have questions about FHA home loans or refinance loans? Ask us in the comments section.
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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