Tuesday, February 5, 2013

Only 16% of Homeowners Refi to a Higher Balance

Freddie Mac reported that 84% of homeowners who refinanced their first-lien home mortgage either maintained the same loan amount or lowered their principal balance by paying in additional money at the closing table, just shy of the record 85% during the fourth quarter of 2011. Of these borrowers, 46% maintained about the same loan amount, while 39% reduced their principal balance in the latest period.

Freddie Mac said the average interest rate reduction was about 1.8 percentage points, or 33%, the largest percent reduction recorded in the company’s 27 years of analysis.

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