Homeowners Are Again Pocketing Cash as They Refinance Properties
Tai Bixby, SIOR, CCIM
Director @ Real Estate Advisors | Commercial Real Estate
By Stefanos Chen
31 May 2017
Americans refinancing their mortgages are taking cash out in the process at levels not seen since the financial crisis.
Nearly half of borrowers who refinanced their homes in the first quarter chose the cash-out option, according to data released this week by Freddie Mac. That is the highest level since the fourth quarter of 2008.
The cash-out level is still well below the almost 90% peak hit in the run-up to the housing meltdown. But it is up sharply from the post-crisis nadir of 12% in the second quarter of 2012.
In a cash-out refi, a borrower refinances an existing mortgage with a new one, typically at a lower borrowing cost, that has a higher principal balance than the existing one. This allows the homeowner to pay off the old mortgage and still have cash left over for other uses...
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