WASHINGTON, Oct. 27 (UPI) -- U.S. homeowners refinancing mortgages in the third quarter showed high levels of restraint, the U.S. Federal Home Loan Mortgage Corp. said Wednesday.
While taking advantage of lower interest rates to refinance in the third quarter, 33 percent of homeowners brought cash to the closing to immediately lower their loan's principal, Freddie Mac said. On the other side of the coin, only 18 percent of homeowners added to their loans by asking for extra cash at the closing.
The 33 percent reducing payment at closings was the second highest percentage on record -- going back to 1985 -- while the percentage adding to their principal at the closing was the lowest on record, Freddie Mac said.
During the quarter, the median interest rate reduction was 1 percent point or 18 percent, which would trim the total cost of a $200,000 loan by $1,400 in the first year of repayments, the mortgage broker said.
