In the fourth quarter, 56% of the homeowners who refinanced their homes got a mortgage at least 5% larger than the original loan, down from 59% in the previous quarter, according to Freddie Mac.However, the percentage was higher than the 45% level recorded a year earlier, the government-sponsored enterprise said in its quarterly refinance review. "The dip in 30-year fixed mortgage rates that happened in the fourth quarter brought down the cash-out share of new refinancings even though the total share of refis went up," said Frank Nothaft, Freddie Mac's chief economist. "When homeowners decide to refinance because of falling interest rates, they might take cash out of home equity because it is convenient, but it is not the main reason they are seeking a new loan. As interest rates rise over this year we should see higher cash-out shares among refi loans, but total dollars cashed out should be lower than in 2004."

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