High Mortgage Refinance Activity in the First Quarter

The share of refinancing mortgages in the total volume of single-family home loans originated in the first quarter of 2015 was 63%. For the whole of 2014, this share was approximately 52%. This data was presented in an official report of Freddie Mac.

The share of loans with cash-out refinancing in the total volume of refinancing mortgages was 27%. This was close to the level from the previous two quarters. In the fourth quarter of last year, this share was 29% while in the third quarter of 2014, it was 27%. For comparison, the share of cash-out refinancing in the first quarter of last year was 17%. Even though the cash-out transactions currently account for over a quarter of mortgage refinance activity, their share remains well below the peak of 89% in second quarter of 2006.

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The estimate of Freddie Mach shows that during the first quarter of this year the net dollar amount of cashed out home equity was $7.7 billion. This is slightly below the revised figure for the fourth quarter of 2014 – $7.6 billion. For comparison, during the peak in cash-out mortgage refinancing in the second quarter of 2006, the net dollar amount of cashed out home equity was $84 million.

Out of all borrowers who refinanced their mortgages in the first quarter of 2015, the share of those who chose to shorten the term of their loan was 34%. The share of borrowers who used the HARP program for refinancing and opted for a shorter loan term was 36%.

On average, borrowers who refinanced their mortgage in the first quarter of the year received an average interest rate reduction of 1.2%. On a $200,000 loan, the average interest payment reduction was 24% or $2,500 over the course of the next year. Borrowers who took advantage of the HARP program got average interest rate reduction of 1.8%.

Christian

Christian

Christian Calvin mortgage Christian is a contributing writer for Mortgage.info. He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.

Contact: christian@mortgage.info
Christian

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