Buy & Sell with Vicki Koeune

Last chance to Refi!

Mortgage rates are being pulled in different directions. Borrowers who want to grab a low rate should act before the tug of war is over.

The Federal Reserve has been doing whatever it can to hold rates down, including printing billions of dollars per month to buy mortgage bonds. But higher mortgage fees, imposed by the Federal Housing Finance Agency, will push rates up this fall.

Starting Nov. 1, Fannie Mae and Freddie Mac will raise the guarantee fees they charge loan originators. On average, the increase translates into about a quarter of 1 percentage point in interest.

It’s almost like the higher fees will be canceled out by the Fed’s open-ended buying program, or QE3, says Brett Sinnott, director of secondary marketing at CMG Mortgage Group in San Ramon, Calif.

Rates will likely stay near the lows until the election, he says. What happens next is anyone’s guess.

“What if after the election, they say, ‘We’re stopping (the bond-buying program) tomorrow,'” Sinnott says.

Borrowers who are on the fence should act soon.

“There is no reason to hold off on refinancing at these levels,” he says.

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