Florida Mortgage Loan Applications Up This Week; Low Rates Spur Refinancing

Applications for Florida mortgages rose last week to their highest level since January as falling interest rates encouraged more loan refinancing, the Mortgage Bankers Association reported today.

The seasonally-adjusted index of total mortgage applications increased 4.3 percent in the week ended November 10 to 647.5. The four-week average for the applications index hit 606.8, up 2.6 percent on the week.

Residential Florida mortgage refinancing surged to its fastest rate since October 2005. Home loan refinancing accounted for 48 percent of all applications, the most reported since back in February 2005.

Much of the refinancing conducted by Florida mortgage lenders has been homeowners exiting adjustable loans taken out when interest rates were lower. Borrowers are proactively refinancing in advance of rate resets, investors believe, saying we are seeing a surprisingly high level of consumer awareness regarding ARMs.

In the U.S. as a whole, at least $1.1 trillion in adjustable-rate mortgages are due to reset in 2007 unless people engage in refinancing. Many of the loans are indexed to short-term home mortgage loan rates tied to Federal Reserve federal funds target rates, which was raised 17 times between early 2004 and right now.

The gauge of Florida mortgage loan refinancing jumped 6.5 percent last week while the firm’s index of mortgage applications for standard home purchases increased 2.7 percent to a four-month high of 412.9.

Long-term, 30-year fixed-rate Florida home mortgage rates dropped 9 percentage basis points (0.09 points) to 6.15 percent, their lowest levels since January.