Average mortgage rate drops to 5-month low

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5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.10 percent this week with an average 0.4 point, down from last week when it averaged 3.18 percent.

30 year fixed rate mortgage interest rates are on the books at 4.000% at Commerce Bank yielding an April of 4.103%.

Despite the short-term lack of movement on rates, Mortgage Brain says there have been year-on-year drops in the cost of mainstream mortgages.

10 year FRMs can be had for 3.125% today with an April of 3.331%.

Monthly payments on a 5/1 ARM at 3.15 percent would cost about $430 for each $100,000 borrowed over the initial five years, but could ratchet higher by hundreds of dollars afterward, depending on the loan's terms. "Following the long period of record lows, however, our short terms analysis can be seen as another sign that were moving towards a period of cost and rate stability, or even potential rises".

USA mortgage industry group says it recommends a multiple guarantor model with at least two entities, preferably more, in a reform of secondary mortgage market. This week the panelists are split, with 38 percent forecasting further declines and 38 percent expecting mortgage rates to remain more or less unchanged over the next week.

On an unadjusted basis, the composite index decreased by 2% week over week.

Those rates don't include fees associated with obtaining mortgage loans.

The MBA's refinance index increased by just 0.2% week over week, and the percentage of all new applications that were seeking refinancing rose from 41.6% to 42.4%. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier.

The Mortgage Bankers Association reported that refinancing activity is down more than 40 percent from a year ago.

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