facebook
twitter
rss
account
search
search
 

Most homeowners do well by refinancing

May 5, 2011 at 5:03 PM   |   Comments

WASHINGTON, May 5 (UPI) -- Three-quarters of U.S. homeowners who refinance their mortgages are keeping their financial house in order, the Federal Home Loan Mortgage Corp. said Thursday.

During the first quarter of this year, three of four homeowners who refinanced their first mortgages either maintained about the same loan amount or reduced their principle by paying additional money at the closing table, the mortgage underwriter commonly called Freddie Mac said in a release.

Homeowners refinancing shaved an average of 1.2 percentage points for a 30-year, fixed-rate mortgage, saving more than $1,800 in interest a year on a $200,000 loan, the mortgage corporation said.

"The average interest rate on single-family mortgages outstanding at the end of 2010 was about 6 percent, so there are still plenty of homeowners that can benefit from refinancing," said Frank Nothaft, Freddie Mac vice president and chief economist. "We found the typical borrower reduced their interest rate about 1.2 percentage points by refinancing during the first quarter. For a 30-year fixed-rate mortgage with a $200,000 loan balance, that's a monthly payment savings of about $150."

The net dollars of home equity converted to cash as part of a refinance was at the lowest level in 15 years, first-quarter data indicated. In the first quarter, an estimated $6 billion in net home equity was cashed out during the refinance, down from $9.1 billion in the fourth quarter of 2010.

© 2011 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
Most Popular
1
New Navy sub ready for outfitting, testing New Navy sub ready for outfitting, testing
2
Russian bank boss feeling sanctions pain Russian bank boss feeling sanctions pain
3
New F-35 sustainment system undergoing flight testing New F-35 sustainment system undergoing flight testing
4
API: Oil imports at historic low API: Oil imports at historic low
5
Apple to authorities: No iPhone user data, even with a warrant Apple to authorities: No iPhone user data, even with a warrant
Trending News
Video
x
Feedback