Mortgage Applications Jump
U.S. mortgage applications jumped last week as record low interest rates spurred a surge in demand for home refinancing loans, data from the Mortgage Bankers Association showed on Wednesday. The MBA said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, increased 32.2 percent to 1,159.4 for the week ended March 20. Refinancing accounted for 78.5 percent of all applications. Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 4.63 percent, down 0.26 percentage point from the previous week, reaching a record low, the MBA said.
Approval Rates Fall
Most people who apply for loans still receive them, with the pull-through rate - the percentage of applicants whose loans are approved - running about 60%, but that's significantly lower than the pull-through rate the Mortgage Bankers Association recorded during the height of the housing boom. In 2003 nearly 79% got their loans. Borrowers with scores of 750 or above accounted for 38% of loans issued during the second quarter of 2008, compared with just 23% just two years earlier, according to the MBA. Those with low credit scores of 650 or less represented only 15% of loans during the first three months of 2008, compared with 28% during the first quarter of 2006.