Remember the days of the ‘cash out refi’? When homeowners eager to make a large purchase, consolidate debt, or splurge on a big vacation, would pull money (equity) out of their homes through a refinance.
Those days seem to be gone.
Consider these 3 recent trends as reported by Freddie Mac:
1) Homeowners are trading in their 30 year fixed rates for shorter terms. This move shaves years off the mortgage and saves 10’s of thousands in interest owed to the bank.
2) Almost 84% of homeowners either brought money to the table to pay down their balance, or kept their balance the same when they refinanced. With so much uncertainty remaining in the housing market, those who were able to refinance, didn’t take any chances, and sought to improve their equity position – or at least not worsen it.
3) The average rate was reduced by 28% through refinancing. This is the biggest drop in 27 years, since Freddie Mac began tracking this type of data.
Still facing economic pressures, homeowners who were able to better their position by increasing equity, saving money, and eliminating long-term debt, did so through refinancing.
Have you refinanced your mortgage this year? Please leave a comment.