|Written by J. Wallace Jr.|
|Wednesday, 11 September 2013 16:55|
Wednesday saw rates take a modest downward turn, but VA mortgage loan rates in many cases (best execution) did not move--you may see the difference in closing costs depending on the lender.
VA loans seem to have found a comfort zone to settle into after several days of fluctuating rates following last week’s two-year high mark for rates in general. However, based on the previous week’s performance and the fact that we’re due for a Fed announcement that could include news of the start of tapering, don’t count on the current “VA mortgage rate comfort zone” to remain in place as-is for long. It’s entirely possible that next week could bring higher rates and different numbers even to the VA/FHA best execution rates.
In the past, VA mortgage rates have been tough to push out of “the zone” once they settle there, but past performance does not indicate future behavior--breaking news, overseas developments, even domestic political issues can all affect mortgage rates. If you’re comfortable with the current best execution numbers, now may be the right time to move on a VA mortgage or refinance before September 18’s Fed announcement.
That said, nobody knows for sure what the Fed will say on the 18th. Could tapering be delayed a few weeks or months more based on the current economic data? Winding down the billions of dollars poured into markets that directly affect mortgage rates could still happen sooner rather than later, but what if that tapering is done in a less aggressive manner? What happens to mortgage rate then?
Chances are good that rates will rise in the short term based on the start of tapering, but it’s equally possible that upward movement may be short-lived, depending on how the markets react to the government’s plans.
Bottom line? It’s not safe to assume rates will definitely move lower for now, but it’s equally uncertain how high they might go or for how long. Depending on the Fed, a brief upward movement is possible, with a faster recovery if the taper plan isn’t as aggressive as it might have otherwise been. We’ll have to wait and see, but for now, watch these rates carefully and make your most informed decision possible when it’s time to commit to a VA loan mortgage rate.
Here are the rates for Wednesday, September 11 2013. The numbers here are reported as best execution rates, which assume ideal conditions. They are not available to all borrowers or from all lenders.
30-year fixed rate mortgages: Between 4.625% to 4.75%