April 30--The continued run of low mortgage interest rates is enticing more homeowners than homebuyers into new loans, as they look to shorten the time it takes to pay off their homes and, increasingly, tap into their equity.
Mortgage refinancings accounted for almost two-thirds of all single-family mortgages originated in the first quarter, according to Freddie Mac's analysis of its data.
About a third of consumers who refinanced during the first quarter shortened their loan term but 27 percent of borrowers increased their loan amounts, the agency said. Those borrowers who were cashing out equity or consolidating other loans into their mortgages, while up from 17 percent a year ago, compared with a peak of 89 percent in 2006.
On average during the quarter, homeowners were able to cut their interest rate by 1.2 percentage points. On a $200,000 mortgage, that interest-rate reduction translates to an interest savings of $2,500 during a 12-month period.
Also Thursday, Freddie Mac reported that the average rate on a 30-year, fixed-rate mortgage was 3.68 percent this week, compared with 3.65 percent last week and 4.29 percent in the same week a year earlier.
mepodmolik@tribpub.com
