Conventional Mortgage Applications 10% Above Year Ago

Applications for conventional loans – any mortgage which is not guaranteed or insured by the federal government – are running 10 percent above levels one year ago, according to the Mortgage Bankers Association.
However, applications for government loans increased 10 percent over just last week, the group also said.
The surge in government-backed loans is likely spurred by borrowers hurrying to avoid scheduled increases in Federal Housing Administration (FHA) mortgage insurance premiums at the beginning of April.
Non-government “conventional loans” have seen a more consistent increase over the past 12 months.
Conventional loans follow guidelines set by the government-subsidized companies Fannie Mae and Freddie Mac. They can be conforming or nonconforming. Loans above the lending limits set by Fannie and Freddie are called nonconforming or jumbo loans.
Conventional loans are “conforming” if they are generally $417,000 or less for a single-family home.
All mortgage applications increased 4.8 percent from one week earlier, the MBA reported for the week ending March 30, 2012.
“Applications to buy a home picked up last week, and are running more than two percent above the level reported at this time last year,” said Michael Fratantoni, MBA’s Vice President of Research and Economics.
The association’s Market Composite Index, a measure of mortgage loan application volume, increased 4.8 percent on a seasonally adjusted basis from one week earlier.
Its Refinance Index increased 4.0 percent from the previous week.  This is the first weekly increase fore refinance applications after six weeks of consecutive declines.
The seasonally adjusted Purchase Index, which measures only applications for home purchases, increased 7.2 percent from one week earlier – its highest level since December 2, 2011.
In February 2012, 85.8 percent of home purchase applications were for fixed-rate 30-year loans, 6.6 percent for 15-year fixed loans and 5.9 percent for ARMs (adjustable rate mortgages).
The share of purchase applications for “other” fixed-rate mortgages, with amortization schedules other than 15 and 30-year terms, was 1.7 percent of all purchase applications.
The average contract interest rate for 30-year fixed-rate mortgages, with conforming loan balances ($417,500 or less), decreased to 4.16 percent from 4.23 percent, with points decreasing to 0.43 from 0.45 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.  The effective rate decreased from last week.

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