Mortgage applications fall

U.S. mortgage applications fell last week as interest rates climbed to 17-month highs and demand for refinancings slid to their lowest level this year.

The Mortgage Bankers Association said its index of mortgage application activity for the week ended November 11 slid 0.6 percent to 657.6.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.33 percent last week, up 0.02 percentage point from the previous week. It was highest level since the week ended June 11, 2004 when the rate reached 6.34 percent.

In 2005, the fixed 30-year mortgage rate, the industry benchmark, has been climbing on and off from its low this year in late June at 5.47 percent.

The group‘s index of refinancing applications dropped 5.4 percent to 1,702.4, its lowest since the week ending December 31, 2004.

The MBA‘s purchase mortgage index, considered a timely gauge of U.S. home sales, rose 2.6 percent to 477.9.

Even though home purchase applications rose for a second consecutive week, they still were below their year-ago level, when the 30-year mortgage interest rate stood at 5.70 percent, substantially below current levels, MBA figures showed.

Fixed 15-year mortgage rates averaged 5.87 percent, up from 5.85 percent the previous week.

Rates on one-year adjustable-rate mortgages (ARMs) increased to 5.46 percent from 5.45 percent.

The MBA‘s survey covers about 50 percent of all U.S. retail residential mortgage originations. Respondents include mortgage bankers, commercial banks and thrifts.

What are people saying about mortgages today:

Rates on 30-year mortgages edged down last week to a seven-month low. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages fell to 6.3 percent, down slightly from 6.31 percent two weeks ago. It put rates at the lowest level since they were at 6.24 percent the first week of March.

Bank of Hawaii, Central Pacific Bank, Territorial Savings Bank and Wells Fargo Home Mortgages all cut their 30-year mortgage rates to 5.75 percent this week.

Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to homeownership. It is a financial instrument that must be managed, just like any other financial investment.