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Fewer people seek loans to buy homes

November 19, 2009|E. Scott Reckard

Despite the lowest mortgage rates since May, applications for loans to finance home purchases fell again last week, the Mortgage Bankers Assn. said Wednesday.

The seasonally adjusted total of applications for purchase loans decreased 4.7% in the week that ended Friday compared with the week before, marking the sixth straight weekly decline.

Refinance applications fell 1.4% last week.

Rates for traditional 30-year, fixed-rate mortgages dropped below 5% in mid-September, helping trigger a mini-boom in mortgage applications, particularly for refinance loans.

But recently, fewer people across the country have applied for mortgages even though the mortgage bankers' survey shows rates have continued to decline.

Last week, the average contract interest rate on 30-year fixed-rate mortgages for borrowers with good credit and a 20% down payment or equity decreased to 4.83%, a six-month low, from 4.9% the week before.

Upfront fees on such loans, including so-called points paid to lenders, averaged 1.17% of the loan value, up from 1.03%.

For 15-year, fixed-rate mortgages, the average interest rate edged down to 4.32% from 4.33%, with average upfront fees falling to 1.01% from 1.15%.

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scott.reckard@latimes.com

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