Overall mortgage applications inched up 0.1 percent last week on a seasonally adjusted basis from the week before, taken higher by borrowers scrambling to refinance, the Mortgage Bankers Association reported today.

The seasonally adjusted refinance index increased by 1.3 percent to 1,608.5 from 1,587.5 one week earlier, and has been positive in each of the last five weeks. The purchase index decreased for a second straight week, down 1 percent to 382.2 from 385.9 the previous week.

The refinance share of mortgage activity increased to 40.6 percent of total applications from 39.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 26.4 percent of total applications from 27.2 percent the previous week, and is now at its lowest level since February 2004.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 6.38 percent from 6.54 percent, with points including the origination fee remaining at 0.98 for 80 percent loan-to-value ratio loans.

Points, which are fees charged by lenders for loan processing, are expressed as a percent of the total loan amount.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 6.04 percent from 6.15 percent, with points including the origination fee increasing to 1.12 from 1.09 for 80 percent loan-to-value ratio loans.

The average contract interest rate for one-year ARMs decreased to 5.91 percent from 5.97 percent, with points including the origination fee increasing to 0.82 from 0.80 for 80 percent loan-to-value ratio loans.

Washington, D.C.-based Mortgage Bankers Association is a national association representing the real estate finance industry. The survey covers approximately 50 percent of all U.S. retail residential mortgage originations, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.

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