Freddie Mac says 77% of homeowners who refinanced first-lien
mortgages in the second quarter either reduced principal loan amounts or
maintained the same loan value while benefiting from historically low interest
rates.
Of those who refinanced, 51% ended up with the same loan amount, while 26%
lowered their principal balance in 2Q, according to second-quarter refinance
analysis from Freddie Mac.
Meanwhile, the median interest rate reduction for a 30-year, fixed-rate
mortgage was about one percentage point, or an interest rate savings of 18%.
Those same borrowers will save about $1,550 in interest payments on a $200,000
loan during the first year of the refinanced loan’s life, Freddie said.
“Savvy homeowners are taking advantage of some of the lowest fixed-rates in
more than 50 years to lock in interest savings,” said Frank Nothaft, Freddie’s
vice president and chief economist.
“Over the first half of 2011, fixed-rate mortgage rates hit a low during
June, with the 30-year product averaging 4.50 percent and 15-year averaging 3.68
percent over the last four weeks of June,” Freddie said in its Primary Mortgage
Market Survey.
About $7.5 billion in home equity was converted to cash in the second quarter
due to refinancings on conventional, prime-credit mortgages, the GSE added in
its report. Adjusted for inflation, the total amount of equity turned to cash
reached its lowest level since 1996.
Figuring in the low rate for refinancing or loan modifications going through, it may be time to consider your other options. It is important to check into all programs available to you before making a decision. Becoming educated, possible getting in touch with a realtor who knows the market in which you live. They can give you an expert opinion on whether it’s time to get out or if your home is possible to save. Giving you the opportunity to reach a place where a comfortable monthly payment can be made.
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