Mortgage rates decline on heels of big jump

Mortgage rates eased this week following last week’s big leap higher, according to the latest survey of lenders.

The 30-year fixed-rate loan of up to $417,000 averaged 5.0%, down from 5.05% last week, mortgage finance company Freddie Mac said in its weekly report.

The typical rate for a 15-year fixed mortgage declined to 4.27% from 4.29%. Borrowers would have paid 0.7% of the loan amount to lenders to obtain the rates, Freddie Mac said Thursday.

In its survey, compiled early each week, the company asks lenders to report the rates they are offering borrowers with good credit, 20% down payments or equity in their homes in the case of mortgage refinancings, and sufficient provable income to afford payments.

Well-qualified borrowers who shop around often find slightly better deals, and it’s also possible to pay more in upfront fees known as points to lower the interest rate.

Mortgage rates have rebounded powerfully from record lows in November, when Freddie Mac reported the average offering rate for a 30-year loan was just 4.17%.

Bankrate.com, which also tracks rates, calculated that fixed-rate 30-year mortgages averaged 4.42% in November, resulting in a monthly payment of just above $1,000 on a $200,000 loan. The same size loan would now require almost $90 more a month to pay off, Bankrate said in a survey also released Thursday.

Mortgage experts said lenders remained finicky about providing credit, and the volume of applications for mortgages remained sluggish despite signs of renewed economic growth and rates that by historical standards are still good deals.

Last week, when typical rates jumped by nearly a quarter of a percentage point, applications for refinance loans dropped by 11.4% from the previous week to their lowest level since July 2009, the Mortgage Bankers Assn. said.

The trade group report said loan applications for newly purchased homes were down by 5.9% after seasonal adjustments.

“Last year the mortgage business was going at warp speed,” Laguna Niguel mortgage broker Jeff Lazerson said. “Since mid-December, new borrowing has become scarce. Folks are waiting for the next price dip to buy, and those that qualified to refinance did the deed in 2010.”

scott.reckard@latimes