Wednesday was the day warnings about the continued potential for market volatility came true--rates were pressured higher due to stronger-than-expected economic news as well as some other factors. The bottom line is that there’s still a great deal of risk for higher rates, and markets are still quite sensitive to bad-for-the-rates news. Good economic news is positive for the country, but can have quite the opposite impact on the markets directly affecting mortgage loan rates. And it did just that on Wednesday, sending conventional mortgage rates out of their previous best execution comfort zone and into a higher single figure (4.5%, up from 4.375%)
If you’re watching the VA mortgage loan rates, you’ll observe that Wednesday’s higher rates did not push VA loan best execution rates out of their current comfort zone. We seem to be, temporarily or not, back in a previous pattern where VA rates settled into that comfort zone and hold there until there’s movement significant enough--or prolonged enough--to push them up or down into new territory.
VA loan and refinance loan applicants may notice a difference in closing costs on days like these, rather than an actual higher rate. As always, VA loan applicants have the option to lower their mortgage rate using discount points, some of which may be included in the loan amount depending on the type of loan and the circumstances of that loan. Discount points are an option not to be taken lightly--consider the costs of buying and not buying discount points carefully.
Will the upward movement of Wednesday spill over into Thursday? Is this the resumption of the previous weeks (prior to the two week recovery) trend of steadily rising rates? That remains to be seen, but it is definitely not safe to assume rates are on their way down over the mid term. Short term gains can be easily erased under the right conditions, as today shows us.
Here are the mortgage loan rates for Wednesday, July 24, 2013. These are best execution rates and may not be available to all borrowers or from all lenders. Your experience may vary depending on your FICO scores and other financial qualifications.
30-year fixed rate mortgages: 4.5%
VA and FHA mortgages: 4.25%
15-year fixed rate mortgages: Between 3.625% and 3.75%
Five year adjustable rate mortgages: Between 3.0% and 3.25%