Freddie: Cash-Out Refis Holding Steady

Meanwhile, Freddie Mac has reported that 82% of the homeowners who refinanced their homes in the first quarter got a mortgage at least 5% larger than the original loan.The percentage was unchanged from that of the previous quarter and a little lower than the 86% level recorded a year earlier, the government-sponsored enterprise said in its quarterly refinance review. "Fixed-rate mortgages averaged 6.2% for 30-year product and 6.0% for 15-year loans during the first quarter of 2007, well below the current rates offered on home equity loans," said Frank Nothaft, Freddie Mac's chief economist. "Home equity loans are generally indexed to a bank's prime rate, currently averaging 8.25%. This interest-rate difference provides a big incentive to borrowers to use cash-out refinance as an alternative to a home equity loan." Freddie Mac can be found online at http://www.freddiemac.com.