Mortgage Applications Take a Time Out
At FREEandCLEAR, we follow the Mortgage Bankers’ Association (MBA) mortgage applications index which measures both purchase and refinance applications for mortgage lenders across the country. An increase in the MBA applications index reflects an increase in mortgage applications while a decrease in the index reflects a decline in mortgage applications.
After a torrid start to 2015 which saw a huge jump in refinance and purchase mortgage applications, the composite mortgage application index, which includes both home purchase mortgages and refinancings, fell 3.2% for the week ended January 23rd as compared to the 14.2% increase in the prior week. Refinancings dropped 5.0% as compared to the 22.0% increase last week and the 66.0% increase in the week before that. Purchase applications were basically flat, declining 0.1% as compared to the 3.0% decline for the prior week and 24.0% increase in the week before that. The mortgage market, and particularly the refinance market, cooled off somewhat after consecutive weeks of robust activity. Interest rates continue to be low although the average interest rate for conforming loans (mortgage amount less than $417,000) increased slightly to 3.83% as compared to 3.80% for the prior week. (Source: Bloomberg)
What it Means for Mortgage Borrowers
After two strong weeks, a slowdown in mortgage application activity did not come as a surprise as lenders work through the onslaught of applications they received to start 2015. A huge uptick in mortgage activity can make it challenging for borrowers to get the appropriate level of customer service they deserve so the slowdown over the last week is not necessarily a negative sign. Interest rates remain low making this a good time for prospective home buyers and people seeking to refinance their mortgages. With the high level of mortgage activity it is more important than ever for borrowers to contact multiple lenders to make sure they are getting the best terms for their mortgage. Because many lenders have a lot of business they may not be inclined to compete for your mortgage so it is important to shop around to make sure you get a mortgage with the lowest interest rate and fees. Use the INTEREST RATES feature on FREEandCLEAR to contact multiple lenders in your area to compare mortgage proposals and find the loan that is right for you.
The FREEandCLEAR Mortgage Expert
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