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CNBC: Mortgage Refinance Applications Surge 9 Percent as Rates Slide

CNBC: Mortgage Refinance Applications Surge 9 Percent as Rates Slide

Wednesday, 06 December 2017 11:19 AM

Total mortgage applications rose 4.7 percent last week from the previous week, CNBC reported.

The increase in the Mortgage Bankers Association's seasonally adjusted report was largely due to a 9 percent weekly jump in applications to refinance.

Lenders suddenly have a strong sales pitch, now that rates are significantly lower than they were a year ago, CNBC reported.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $424,100 or less decreased to 4.19 percent from 4.20 percent, with points increasing to 0.40 from 0.34, including the origination fee, for 80 percent loan-to-value ratio loans. The rate stood at 4.27 percent one year ago.

"The refinance share is at its highest level since September," said Mike Fratantoni, chief economist at the MBA. "Purchase volume continues to be supported by a strengthening job market."

Meanwhile, Reuters reports that thousands of homeowners in Republican-leaning areas who could be hit by the elimination or reduction of tax breaks for homeowners, a Reuters analysis of federal mortgage and tax data shows, potentially opening those districts to a Democratic challenge in the November 2018 mid-term elections.

The Republican party’s proposed tax overhaul includes limits on the deductions for mortgage interest, state taxes and property taxes, Reuters explained.

The plans are expected to affect mainly the Democratic-leaning “blue states” such as California, New Jersey and New York where homes are expensive, mortgages are huge and state and local taxes tend to be high.

But while these blue states will be hardest hit, county level data also shows there is a significant number of Republican enclaves in districts expected to be hotly contested in next year's polls that will feel the pain. Republican leaning pockets in blue or swing states, such as Orange County, California, or Loudoun County, Virginia, tend to have high property values – and thus the higher mortgages. Many of these areas also tend to have higher state and local income taxes.

The bill passed by the U.S. House of Representatives on Nov. 16 let homeowners who take out new mortgages deduct only the interest paid on the first $500,000 of a mortgage. It also ends deductions for state and local income taxes, and caps deductions for property taxes at $10,000.

The Senate’s plan, passed on Saturday, would keep the mortgage interest deduction as is, on any mortgage up to $1 million, but agrees with the House on state, local and property taxes. The two houses of Congress are now reconciling the two versions.

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CNBC: Mortgage Refinance Applications Surge 9 Percent as Rates Slide
mortgage, refinance, applications, rates, home, loan
Wednesday, 06 December 2017 11:19 AM
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