November 16, 2015
For six days in a row, mortgage rates pushed higher. Then, for three days last week rates either leveled off or tried to improve. We’ve seen a general upward trend since Fed statements about a possible interest rate hike; the trends seems to be upwards for now in anticipation of the December Fed announcement that could reveal more about that possible rate hike.
And in the meantime, breaking economic news or world events could also come together to influence rates depending on the nature of those headlines or events. It’s not just domestic economic news at work as an influencing factor on mortgage loan rates.
All the talk of the Fed raising rates has markets and investors reacting in ways that put upward pressure on mortgage rates in general. 30-year fixed rate conventional mortgage loans are, best execution, at between 4.0 and 4.125%, with FHA mortgage rates at 3.75%.
Best execution rates are offered to borrowers with outstanding FICO scores and other financial qualifications. Your access to these rates depends on those factors and what the participating lender is willing to offer–your experience may vary.
Industry professionals are mixed when it comes to locking in a mortgage loan interest rate commitment or floating in hopes of lower rates in the short term. Some favor floating, and it’s true that we could see a bit of a rally if conditions are favorable when the markets open again on Monday. But it’s just as likely to go the other way, and no borrower should ever think about floating as a “risk-free” option.
As some industry pros and market watchers have pointed out, it’s not impossible for rates to improve in the current climate, but it may take more “downward pressure on mortgage rates to bring them back to where they were previously (with FHA best execution rates at 3.5%), so that is definitely something to keep in mind when considering your options.
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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