Mortgage loan rates and refinancing loan rates might not get much lower; that’s the indication some are taking away from a set of headlines on Thursday connected to the rates and how and how long the Fed is administering its latest round of quantitative easing (QE4).

Two economists at the New York Federal Reserve say it’s unlikely that mortgage loan rates could dip as low as 3%, but that would require some legal overhauls first--could those overhauls actually happen?

Fortune Magazine recently reported that even if they do, there’s no guarantee the rates will go that low. And then there is the “bombshell” reported today in the financial press of the Fed’s December Policy Meeting minutes which were released today. Those minutes indicate a contradiction from earlier Fed talk of continuing QE4 efforts up to 2015. The Fed has been purchasing Treasuries and mortgage-backed securities to the tune of some $40 billion per month since late last year, and that practice is now in question--could it survive the full length of the new year?

Some in the Fed are in favor, some are not. One result of this QE4 measure has been that mortgage rates stay low. If the Fed purchases stop suddenly, or taper off during 2013 instead of continuing as the Fed indicated they might in earlier discussions, what happens to the mortgage rates? What happens to the rates as long as there is uncertainty about the future of QE4? All important questions.

It seems clear rates may be on the way up; is now the right time to buy or refinance with a VA loan? Many sources believe it is. Borrowers should take a good look at their financial plans at present; holding out for even lower interest rates may not be a sound strategy based on today’s uncertainty.

Here are the mortgage rates for Thursday January 3, 2012. These are best execution rates--your experience depends on your credit qualifications and lender participation.

30-year fixed rate conventional mortgage rates: Between 3.375 and 3.5%
VA mortgage loan rates: 3.25% (VA Borrowers will find more variation with these rates between lenders than with conventional loan equivalents.)
FHA mortgage loan rates: 3.25% (FHA Borrowers will experience greater variation with these mortgage rates between lenders.)
15-year fixed rate mortgage loans: Between 2.875% and 2.75%
5-year adjustable rate mortgages: Between 2.625 and 3.25% depending on the lender.

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