Refinancing Drives Increase In Mortgage Applications
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WASHINGTON, D.C. (January 23, 2008) — The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 18, 2008. The Market Composite Index, a measure of mortgage loan application volume, was 981.5, an increase of 8.3 percent on a seasonally adjusted basis from 906.4 one week earlier. On an unadjusted basis, the Index increased 11.0 percent compared with the previous week and was up 63.7 percent compared with the same week one year earlier.“Refinance applications are up 92% since the beginning of November and purchase applications are up 7%. With tighter credit conditions we do not know how many of these applications will become loans, but it is clear that borrowers are responding to the 40-80 basis point drop in rates we have seen since November 2 across products,” said Jay Brinkmann, Vice President of Research and Economics at the Mortgage Bankers Association.
The Refinance Index increased 16.9 percent to 4178.2 from 3575.5 the previous week and the seasonally adjusted Purchase Index decreased 4.6 percent to 439.9 from 461.2 one week earlier. The Conventional Purchase Index decreased 5.5 percent while the Government Purchase Index (largely FHA) increased 1.0 percent. On an unadjusted basis, the Purchase Index increased 1.1 percent to 369.7 from 365.7 the previous week. The seasonally adjusted Conventional Index increased 8.3 percent to 1413.7 from 1305.5 the previous week, and the seasonally adjusted Government Index increased 8.2 percent to 260.9 from 241.2 the previous week.
The four week moving average for the seasonally adjusted Market Index is up 13.7 percent to 782.0 from 687.5. The four week moving average is up 2.8 percent to 419.0 from 407.6 for the Purchase Index, while this average is up 23.6 percent to 2967.2 from 2401.5 for the Refinance Index.
The refinance share of mortgage activity increased to 66.0 percent of total applications from 62.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 9.3 from 9.2 percent of total applications from the previous week.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.49 percent from 5.62 percent, with points increasing to 1.07 from 0.94 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.96 percent from 5.07 percent, with points increasing to 1.22 from 1.09 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for one-year ARMs decreased to 5.51 percent from 5.77 percent, with points increasing to 1.01 from 1.00 (including the origination fee) for 80 percent LTV loans.
SPECIAL NOTES
The survey covers approximately 50 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.
The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 500,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation’s residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 3,000 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA’s Web site: www.mortgagebankers.org.
10 Comments on this post
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hensue said:
My son has a home that is to reset its interest rate in june 08, he bought it in june 06. It will reset to 6.25% plus index if it was today exactly how much is the index rate?
Thank you
Sue
He is deployed, no one is there on this base to buy this house, he will probably go to another base when he gets back in jan09. The house interest will reset twice by then. Also there is a prepayment penalty for three years. It is being serviced by select portforlio services they are all over the rip off reports. What should we do?January 25th, 2008 at 10:35 pm -
admin said:
Has your son given you power of attorney? I would refinance his loan asap. Go will a large lender Ex. Wachovia, Wells Fargo or Bank of America. They normally are less in fees or have “no closing costs.”
Of course apply for a fixed rate mortgage. If necessary, you can probably get everything done with electronic signatures from your son. DocuSign is the provider we use for electronic signatures and you can find them at http://www.docusign.com
January 26th, 2008 at 11:05 am -
hensue said:
yes he has given power of attorney to sell his home. They said that would include refinancing. I guess you have to sell to refinance. Are you saying go va or anywhere? When he gets back he will probably go to another base. What credit score does he need?
Thanks
hensueJanuary 26th, 2008 at 11:48 am -
admin said:
Only refinance if your going to keep the house. If your son no longer wants the house especially since he is not here, just remember he might upside down because he has been making payments for only 18 months. What part of the country is the house located in?
January 26th, 2008 at 12:19 pm -
hensue said:
That is the problem he is in kentucky will only have about a year left. When he returns and he might be sent to another base. What should we do?
Thanks
hensueJanuary 26th, 2008 at 12:59 pm -
hensue said:
It is Oak Grove ky. when the whole army gets back, you usually do not have a problem selling it. It might set twice before then.
I have no idea what those payments would be?
Thanks
hensue
he owes 91,000.00 right now has it with a realtor at 109.000January 26th, 2008 at 1:03 pm -
admin said:
If your son no longer wants the house then go ahead and sell it. Just make sure you have a fair price set. If the property is over priced, it will sit there for months. If your going to keep the property, maybe rent it out, then go ahead and refinance then.
If your son “has it with a REALTOR at 109K,” then it sounds like your son wants to sell. If the property is priced right, marketed correctly, then the property should be sold before then next reset of June 08.
January 26th, 2008 at 1:51 pm -
hensue said:
Here is the problem when a base is deployed like that. These houses will not sell or rent. Till they get home 12 to 15 months. if i refinance 91,7000. With a 1% prepayment penalty for 3 years. It will sell when he gets back they will not have enought houses then.
If he did not use a realtor then could we still make money.
remember he owes 91,700. 1% prepayment penalty. There is no one around to rent or buy but will be in a year! He paid 98.000. I do not know how the va loans work about refinancing. I think he might still be able to make some money do you. I just do not want him to lose it. He put his re-up money on this house. He re-upped for 3 years.
HensueJanuary 26th, 2008 at 2:49 pm -
admin said:
I would recommend sitting down with a loan officer in your area. Make sure he or she has been in Mortgage Industry for some time.
January 26th, 2008 at 5:58 pm -
hensue said:
I am responding to all your great answers about my sons house in Kentucky. I do not live there. I live in south Georgia. Can anyone out there give me a name of a reputable lender in around fort campbell KY.
Thanks
hensueJanuary 27th, 2008 at 11:40 am