July 13, 2016
Mortgage loan rates moved decisively higher on Tuesday, marking the first real upward trend we’ve seen since the Brexit vote. It’s true that you can’t have a sustained drop in rates without some kind of eventual pushback; that’s what we’re seeing now for a variety of reasons.
30-year fixed rate conventional mortgages have left their previous range behind; last week the bottom end of that range rivaled FHA mortgage rates at 3.25% best execution for some of the most aggressive lenders. Now it’s back up to 3.375% territory, and some lenders are offering best execution rates higher than this.
FHA mortgage loan rates are still holding at 3.25% at the time of this writing, but if there is more significant change to rates in the coming days we’re likely to see FHA interest rates (best execution) break out into a range with 3.25% at the bottom end.
FHA rates do tend to vary more among participating lenders, so it is a good idea to shop around for the most competitive rates and terms.
Mortgage loan rates quoted here are listed as “best execution”; your FICO scores and loan repayment history will play a part in determining your access to rates like these. Best execution rates are not available to all borrowers or from all lenders, your experience may vary.
Over the short term, some industry pros are advising borrowers to assess their risk tolerance before choosing to float. With rates on the rise, it’s important to determine ahead of time how high rates might climb before cutting your losses and committing to a mortgage rate lock with your lender.
In spite of rising rates, the numbers reported here are still low in the grand scheme of things. Brexit drama continues to be a factor for mortgage rates at the time of this writing, as are the outcomes of Treasury auctions and investor reaction to economic data releases.
If you are undecided about locking up a mortgage rate commitment with your lender or floating in hopes of a better rate, remember that floating is never risk-free; borrowers who are within 90 days of closing may wish to ask their lender for some advice about locking or floating.
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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