Decline in mortgage rates leads to rise in refinancing applications
With mortgage interest rates dropping slightly, the Mortgage Bankers Association (MBA) reported an increase of 2.2 percent in mortgage loan applications for the week ending January 7, 2011.
The refinance share of mortgage applications rose to 72.1 percent of all home loan applications, compared to 71 percent the previous week.
While mortgage experts expect an uptick in applications for adjustable rate mortgages (ARMs) if mortgage interest rates creep higher this year, it appears that mortgage applicants so far are looking to lock in a fixed-rate home loan. ARM applications dropped slightly last week to 4.9 percent of all mortgage applications.
HSH.com reports that average mortgage interest rates fell slightly to 5.12 percent with 0.29 points for a 30-year fixed-rate mortgage. The best average mortgage rate reported by HSH.com for the week ending January 7 was for a 3/1 ARM at 3.77 percent with 0.27 points. For some homeowners intending to sell their home within three years, a short-term ARM can generate significant savings in interest payments.
