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Interest rates drop below 5 percent for 30 year fixed rate loan; applications increase

Dennis Norman

Dennis Norman

By: Dennis Norman

The Mortgage Bankers Association (MBA) released its weekly mortgage applications survey for the week ending September 18, 2009. The report showed an increase of 12.8 percent in mortgage loan applications from the week before fueled by interest rates dropping below 5 percent for the first time since mid-May.

The bulk of the activity (63.8 percent of all applications) were homeowners refinancing their existing mortgages. Over the past four weeks shows homeowners refinancing existing loans is up 6.8 percent while borrowers financing the purchase of a home is only up 0.7 percent.

Interest rates and fees for the week:

  • 30 year fixed-rate mortgage interest rates decreased to 4.97 percent from 5.08 percent the previous week, with fees increasing to 1.12 percent from 0.98 percent on loans that are 80 percent of the value of the home
  • 15 year fixed rate mortgage interest rates remained unchanged at 4.41 percent with fees decreasing to 1.05 percent from 1.12 percent on loans that are 80 percent of the value of the home
  • One-year ARM interest rates decreased to 6.52 percent from 6.61 percent, with fees increasing to 0.28 percent from 0.20 for loans that are 80 percent of the value of the home
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