More borrowers paying down blac

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