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Cash-out refinances on the rise

Posted by Mehran Aram on Wed, Apr 17, 2019 @ 06:04 AM

Homeowners in the U.S. are sitting on $5.7 trillion in equity borrowing potential according to Black Knight, a mortgage-data and technology company. This is a record high. When coupled with low mortgage rates, it’s not surprising that cash-out refinances are near their highest levels since 2007. Freddie Mac has previously reported that approximately 8 out of every 10 refinances happening have the homeowner taking cash-out of their home’s equity.

Some experts predicted that cash-out refinances would drop after new federal tax laws eliminated the interest deduction for equity loans unless the money is spent on home improvements that will raise property value. However, any declines due to these changes in tax law have apparently been countered by favorable borrowing rates.

Today, conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent, 15-year rates are near 3.625 percent and the 5-year ARM is averaging 4.00 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: home equity, Freddie Mac, Black Knight, Mortgage rates, Property Values, cash out refinance, Homeowner, Federal Tax Laws

Cash-out refinances at 11-year high

Posted by Mehran Aram on Wed, Nov 28, 2018 @ 16:11 PM

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.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: San Diego, homeowners, California, Freddie Mac, Mortgage rates, cash out refinance

Using equity to pay for home repairs

Posted by Mehran Aram on Wed, Nov 14, 2018 @ 21:11 PM

The real estate market continues to be a battlefield for some with rising rates and prices. As a result, more homeowners are choosing to fix up their current home rather than look for a new one. Making much needed repairs or adding upgrades are generally thought of as good investments. In a survey conducted by NerdWallet, more than 70 percent of homeowners said the best way to add value to their existing properties is through home improvement projects.

Data from the U.S. Census Bureau shows that Americans spent approximately $450 billion on their homes between 2015 and 2017.

Financing these projects is made a little easier by utilizing the equity built up in a home. Establishing a home equity line-of-credit or applying for a cash-out refinance can help fund a kitchen remodel, a leaky roof repair or any other array of projects that is on the homeowner to-do list.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.875 percent, 15-year rates are near 4.325 percent and the 5-year ARM is averaging 4.325 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: real estate, homeowners, Mortgage rates, home owners, HELOC, home remodel, home repair, cash out refinance