More borrowers paying down blac

TRD New York /
Jul.July 29, 2010 10:00 AM

Homeowners looking to refinance are increasingly putting down cash at the closing table in order to lower their principal balance and take out a new loan at a lower rate, according to data from Freddie Mac released yesterday. During the second quarter, 22 percent of homeowners who refinanced put down additional money to pay off some of their principal for the third-highest “cash-in” share of refinancing borrowers since Freddie Mac started tracking them in 1985. Borrowers who increased their loan balance by 5 percent or more — or took “cash-out”, as the practice is called — made up 27 percent of refinance loans during the second quarter. The last three quarters have seen the lowest “cash-out” shares since 1985, which the Freddie Mac report attributed to low home prices and tightened underwriting standards. “Interest rates on fixed-rate mortgages are at 50-year lows, making refinancing attractive if borrowers qualify, and similarly rates on savings instruments like CDs are also very low, which makes the choice of paying down mortgage principal very attractive to borrowers with extra cash reserves,” explained Frank Nothaft, vice president and chief economist at Freddie Mac. TRD

 

Related Articles

arrow_forward_ios
The rates for a 30-year fixed-rate mortgage dropped 7 percentage points for the week ending September 10, reaching 2.86 percent. (iStock)

Mortgage rates notch new low

Mortgage rates notch new low
FHFA Director Mark Calabria and PIMCO CEO Emmanuel Roman (Getty, iStock)

PIMCO warns of danger in Fannie, Freddie privatization

PIMCO warns of danger in Fannie, Freddie privatization
Wells Fargo CEO Charles Scharf (Scharf by Win McNamee/Getty Images; Unsplash)

Borrowers sue Wells Fargo over forbearance policy

Borrowers sue Wells Fargo over forbearance policy
FHFA director Mark Calabria (Getty; iStock)

Fannie and Freddie extend eviction, foreclosure moratorium

Fannie and Freddie extend eviction, foreclosure moratorium
Here are the multifamily borrowers getting the most forbearance from Fannie & Freddie

Here are the multifamily borrowers getting the most forbearance from Fannie & Freddie

Here are the multifamily borrowers getting the most forbearance from Fannie & Freddie
(iStock)

Mortgage rates are sub-3%. How will buyers and lenders react?

Mortgage rates are sub-3%. How will buyers and lenders react?
The 30-year fixed-rate mortgage averaged 3.07 percent for the week ending July 2 (iStock)

Mortgage rates hit all-time low

Mortgage rates hit all-time low
Freddie Mac of Debby Jenkins (Freddit Mac, Getty)

Freddie Mac extends multifamily loan forbearance relief to landlords

Freddie Mac extends multifamily loan forbearance relief to landlords
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...