Freddie: ‘Cash-In’ Refis Still All the Rage


Consumers who refinance are continuing to pay down their loans, at least in part, hoping to save thousands of dollars over the long haul, according to new figures compiled by Freddie Mac.

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The GSE said 77% of consumers who refinanced in the second quarter either kept their loan balance the same, or reduced it. In 1Q the ratio was 75%.

Roughly 26% of mortgagors engaged in a ‘cash-in’ refi by bringing more money to the closing table in an effort to reduce principal. In 1Q, 21% of consumers engaged in cash-in transactions.

“This is primarily a ‘rate-and-term’ market, meaning that the typical homeowner is looking to cut their interest rate or shorten their loan term,” said Freddie chief economist Frank Nothaft.

Cash-out refis accounted for just 23% of the market, compared to 46% from 1985 to 2010.

Daily Briefing | Friday, August 5, 2011

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