Applications for mortgages surged 17 percent last week as lower interest rates spurred demand for both refinance and purchase loans, the Mortgage Bankers Association said in releasing the results of its Weekly Mortgage Applications Survey.
Applications for refinancings were up 22.5 percent for the week ending Sept. 4, the largest increase since March, while an index measuring applications for purchase loans was up 9.5 percent from a week earlier. Both indexes are seasonally adjusted.
Requests for refinancings made up 59.8 percent of applications, up from 56.5 percent the week before, and applications for adjustable-rate mortgage (ARM) loans accounted for 5.8 percent of applications, up from 5.6 percent.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.02 percent from 5.15 percent, with points increasing to 1.23 from 1.09 (including the origination fee) for 80 percent loan-to-value-ratio (LTV) loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.45 percent from 4.57 percent, with points increasing to 1.13 from 0.85 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for one-year ARMs decreased to 6.69 percent from 6.71 percent, with points decreasing to 0.19 from 0.2 (including the origination fee) for 80 percent LTV loans.
Those rates are for prime borrowers making 20 percent downpayments or with an equivalent amount of equity in their home. Borrowers with blemished credit seeking loans with higher LTVs can expect to pay higher rates.
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