The number of homebuyers applying for mortgage loans rose in February as fixed rates fell below 5 percent, according to the Mortgage Bankers Association. Among these mortgage applicants could be current mortgage borrowers who want to refinance their loans to avoid foreclosure. The MBA reported its mortgage application index increased by more than 45 percent to 875.3 during the week ended February 13.
The 875.3 index, the highest point since January 16, was reached when the average fixed-mortgage rates fell to 4.99 percent. MBA attributes the increase in the index to a significant increase in borrowers refinancing their mortgage loans.
Among these borrowers could be homeowners who have been able to pay their monthly amortizations, but who have faced difficulties in coming up with payments recently due to the downturn. Applying for loan refinancing will put them safely away from foreclosure. The index for this kind of loan has increased by more than 64 percent to 4,472.9.
In a similar direction, the gauge of loan applications for home purchases also increased by 9.1 percent to 257.3. MBA observed that mortgage rates have been following the decline in the returns of U.S. Treasury notes as the global economy continues to slow down and as the U.S. housing market continues to be flooded with foreclosed homes.
Although yields of U.S. government securities are also declining, investors have been buying them because of their relative safety. Stock indexes have been falling continuously since the start of the year, with just a few indications of an upward movement.
According to bankrate.com, the 30-year fixed mortgage rate dropped to 5.27 percent while the 15-year fixed rate fell to 4.93 percent. The adjustable-rate-mortgage rate also decreased to 5.59 percent.
The stability of mortgage rates in their attractive levels was also maintained because of efforts by the Federal Reserve to keep consumer rates lower. The Fed has been purchasing mortgage-backed securities in an effort to keep rates low and to help the country deal with the foreclosure crisis.
The record low 4.89 percent mortgage rate in early January put the MBA mortgage application index to the 1324.8 point, the highest level since July 2003. The 30-year mortgage rate however increased to 5.28 in January because of concerns about the rising Treasury debt.
The effort to keep mortgage rates low will be further boosted by Obama’s foreclosure plan, which includes expanding the $500-billion mortgage-backed securities purchase program launched in November 2008 under the Bush administration.
Author Resource:-
John Cutts has been educated in the finer points of the foreclosures market over 5 years. Read foreclosed homes news at Foreclosure-Support.com - Your online source for foreclosure listings for sale.
![[Valid RSS feed]](http://www.realestateproarticles.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites