Mortgage Loan News For Friday January 25 2013

For many weeks now, we’ve warned readers not to take “record low” mortgage rates for granted. Every week we’ve written about mortgage loan rates going up and down, back and forth, things have in recent times always seemed to return to a fairly limited range of best-execution rates. Those rates for 30-year conventional mortgages has been between 3.375% and 3.5% depending on the market, the lender and borrower qualifications.

Friday’s market performance finally saw rates swing out of this “comfort zone” and not in a good way. Mortgage rates have, in the words of some industry professionals, “skyrocketed” on Friday as a result of financial data from overseas and a domestic mortgage-backed securities sell-off that directly influenced mortgage rates.

Closing costs, mortgage rates, or both at once can move higher in situations like these and today they did. Best execution rates for 30-year conventional mortgages with fixed interest rates were as high as 3.625%. Some lenders still offered rates at or near 3.5%, but check those associated costs--you may find the loan more expensive today than it has been in some time.

We could go into detailed analysis of why this happened, but what’s most likely on the minds of anyone reading this is, “what happens next?” Some industry pros are saying “lock in your rates now or at least get your loan paperwork moving” while others are saying “I told you so” and “get ready for even higher rates to come.”

This is the point where we’ve been advising borrowers who have not yet committed to a mortgage loan or refinance loan to consider their strategy about waiting. If you have not yet made that commitment, you have some tough choices to make. Will rates creep even higher? Swing back down to the levels enjoyed earlier this month? Will a sharp upward turn in the rates be an ongoing trend or is today’s performance simply a reaction to the wrong market conditions at the right time? All valid, important questions to ponder as you consider your next move.

Here are the best-execution rates for Friday January 23 2013. These rates assume ideal conditions and your experience may vary depending on your credit score and other variables. Use these numbers as a baseline, not as a guarantee that you will get them with any lender.

30-year fixed rate conventional mortgages: Between 3.5% and 3.625%
FHA and VA mortgage rates: 3.25% (FHA and VA rates can vary more between lenders than conventional equivalents.)
15-year fixed rate mortgages: 2.875%
5-year adjustable rate mortgages: Between 2.625% and 3.25%

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