In the second quarter, 39% of the homeowners who refinanced their homes got a mortgage at least 5% larger than the original loan, down from a revised 42% in the previous quarter, according to Freddie Mac.However, the percentage was higher than the 33% level recorded a year earlier, the government-sponsored enterprise said in its quarterly refinance review. "The very low interest rates that we saw in March, when 30-year fixed-rate mortgage rates averaged 5.4%, caused an increase in overall refinancing activity for the loans that closed in the second quarter," said Amy Crews Cutts, Freddie Mac's deputy chief economist. "When we see regular rate-and-term refinancing increase, the share of cash-out refis drops. Most homeowners are happy to reduce their monthly payments and don't feel a need to withdraw equity; however, lower mortgage rates make home-equity conversion an affordable option for financing other investments such as home improvements or paying for college."

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