Refinance Applications Jump
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. Driven by a significant significant boost in refinance application activity attributable to falling interest rates, the mortgage application index for the week ended October 17th, 2014 increased for the third consecutive week.
For the week ended October 17th, the refinance application index increased a significant 23.0% as compared to the prior week, which was up 11.0%. The purchase application index decreased 5.0% as compared to the prior week, which was also down 1.0%. The composite index, which includes both purchase and refinance mortgage applications, increased 11.6% as compared to the prior week. The increase in the index is attributed to the continued decline in interest rates, which has a more immediate impact on refinancing applications, in comparison to purchase applications which typically take longer to respond to changes in interest rates (because it takes longer for consumers to find and buy a home and apply for a mortgage in response to lower interest rates). The average interest rate for conforming loans declined to 4.10%, as compared to 4.20% for the prior week. (Source: Bloomberg)
What it Means for Mortgage Borrowers
The decline in interest rates continues to have a strong effect on existing borrowers who are taking advantage of lower interest rates to refinance their current mortgages. Over time, lower interest rates and flattening home prices should also pull more home buyers into the market and boost purchase mortgage applications. Use the FREEandCLEAR Mortgage Refinance Calculator to determine how much money you can potentially save by refinancing your existing mortgage and lowering your interest rate. Additionally, use the COMPARE LENDERS feature on FREEandCLEAR to monitor interest rates for lenders in your area.
The FREEandCLEAR Mortgage Expert
www.freeandclear.com
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