NEW YORK — Mortgage applications rose for a second week as demand for home purchase loans outweighed slower refinancing activity, an industry trade group said Wednesday.

The Mortgage Bankers Association says its seasonally adjusted index of mortgage application activity, which includes both refinancing and purchasing loans, increased 0.6% to 657.2 the week ended April 27 .

The four-week moving average of mortgage applications, which smooths the volatile weekly figures, was up 0.3%.

U.S. housing industry indexes, in general, tend to be volatile. Recently, they have painted a mixed picture, with some pointing to weakening and others to stabilization in the hard-hit sector.

(more…)

WASHINGTON — There is a language of money, complete with its own vocabulary. It’s in your interest to know as much of the terminology as you can, so don’t be too embarrassed to ask what something means.

One participant during a recent online discussion asked me a question that some might dismiss as naive. But it was a question that many people should have asked before they bought their homes. After all, in a recent survey commissioned by bankrate.com, 34 percent of homeowners with mortgages didn’t have a clue as to what type of loan they had.

“There have been many stories in the news about subprime loans,” the reader wrote. “What exactly is a subprime loan? And what exactly is the problem with defaulting on a subprime loan versus a prime loan? Are there signs to watch out for when you are discussing mortgages with a bank or a lender?”

(more…)

Washington Mutual Inc., the largest U.S. savings and loan, offered to refinance $2 billion worth of mortgages at lower interest rates to help subprime borrowers meet rising payments on their homes.

Homeowners who anticipate higher payments on a Washington Mutual adjustable-rate subprime mortgage can apply for assistance, the Seattle-based thrift said Wednesday in a statement.

One of the options is a 30-year, fixed-rate loan that charges half a percentage point of interest less than borrowers would otherwise pay.

(more…)