Rates and Refinance Applications up slightly

January 21st, 2011

Using mortgage calculators to determine your savings from a refinance mortgage or costs for a new home loan? Here is a quick update on what has happened this week that impacts mortgage rates and the mortgage industry to assist you with our decision.

Mortgage rates increase

Freddie Mac released its Weekly Primary Mortgage Market Survey on January 20, 2011 and it showed a slight increase in the benchmark 30 year fixed rate mortgage. The rate on January 20 was 4.74 percent at a cost of 0.8 origination points, up from 4.71 percent at the same cost the prior week. This is the first increase in the benchmark rate in three weeks.

If you have been using mortgage calculators to assist you with a refinance mortgage or new home loan you may want to adjust the interest rate you are inputting.

Mortgage applications rise

The Weekly Applications Survey from the Mortgage Bankers Association saw an increase in total applications of 5.0 percent for the week ending January 14, 2011. The increase in total applications was a result of a 7.7 percent increase in refinance mortgage applications for the week, the third week in a row the refinance index has increased. The number of refinance applications is at the highest level since early December. A 1.9 percent decline in purchase mortgage applications for the week put the purchase application index at 16 percent below the number of applications for the same week in 2010.

If you have been using prequalification calculators to determine your purchasing power be aware that with purchase applications declining some lenders may offer pricing incentives for purchase mortgage transactions.

Home sales

Despite increasing mortgage rates for most of December the National Association of Realtors reported that sales of existing homes increased 12.3 percent in December 2010 from November 2010. The increase was the fifth in the previous six months. Despite the increase in December sales the total sales were still 2.9 percent below the existing home sales in December 2009.

Use mortgage calculators to help plan your mortgage goals for 2011.

Posted By :
Dennis C. Smith is co-owner and broker of record for Stratis Financial in southern California. He has over twenty years' experience in the mortgage industry.

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