NEW YORK — Homeowners rushed to take advantage of last week’s drop in interest rates following the government’s takeover of Fannie Mae and Freddie Mac, but rates are rising again on investor fears over the eroding conditions in financial markets.
A mini-refinance boom started last Thursday but ended early Monday, said Pava Leyrer, president of Heritage National Mortgage in Michigan. The average rate on a 30-year, fixed rate mortgage was 6.14 percent Wednesday, up from 6.02 percent last week after the government bailed out Fannie and Freddie, according to HSH Associates.
“We’ve had three rate changes in an afternoon, and not for the good either,” Leyrer said Wednesday.
Last week, refinance applications spiked 88 percent, according to the Mortgage Bankers Association. Refinances accounted for nearly 52 percent of applications, up from 36 percent the previous week, the trade group said.
While the number of applications soared, the approval rate will likely be low because appraisals for many homes are coming in close to or below the amount of the existing mortgages.
