8 out of every 10 refinances happening in the U.S. are cash-out refinances according to new data. This is the highest volume of American’s choosing a cash-out option during the refinancing process since 2007. This is according to mortgage giant Freddie Mac’s data for the third quarter.
The report shows that a little over 88 percent of borrowers who refinances in Q3 elected a cash-extraction, totaling $14.6 billion in liquidated equity. This is down from $15.8 billion in Q2, likely due to a slow-down in refinance activity amid higher mortgage rates.
Cash-out refinances are particularly popular in California, the nations’ highest concentration of homeowner equity. Today, conforming no-point 30-year fixed mortgage rates are averaging 4.875 percent, 15-year rates are near 4.25 percent and the 5-year ARM is averaging 4.5 percent.
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