Cash-Out Refi % Jumps

In the second quarter, 74% of the homeowners who refinanced their homes got a mortgage at least 5% larger than the original loan, the highest level since the fourth quarter of 2000, according to Freddie Mac.The percentage was up from 64% in the previous quarter and far higher than the 43% level recorded a year earlier, the government-sponsored enterprise said in its quarterly refinance review. "Interest rates on 30-year, fixed-rate mortgages dipped lower in the second quarter, spurring refinance activity higher," said Frank Nothaft, Freddie Mac's chief economist. "Mortgage borrowers took advantage of these low rates by cashing out some home equity before rates go up, as they are expected to in coming quarters." The GSE is forecasting that 30-year fixed mortgage rates will rise through the end of the year, averaging about 6% in the fourth quarter. Freddie Mac can be found online at http://www.freddiemac.com.