When choosing to refinance their mortgage, Freddie Mac reports that most borrowers choose to take the unpredictability out of their monthly payments by switching to a fixed-rate mortgage.
The government-sponsored enterprise's Quarterly Product Transition Report showed that 95 percent of refinancing borrowers chose FRMs in the second quarter. Thirty-percent of borrowers were able to reduce their loan term, while 67 percent kept the same term.
"Compared to a 30-year fixed-rate mortgage, the interest rate on a 15-year fixed was about three-quarters of a percentage point lower during the second quarter," said Frank Nothaft, vice president and chief economist at Freddie Mac. "For borrowers motivated to refinance by low fixed-rates, they could obtain even lower rates by shortening their term."
Many borrowers have been able to take advantage of the newly revamped Home Affordable Refinance Program. HARP 2.0 opened up to a whole new group of borrowers by allowing loan holders with mortgage insurance to refinance their home loans.
The program, which remains popular, is the only one that allows underwater borrowers to refinance their mortgages.
This entry was posted on Wednesday, August 15th, 2012 at 3:00 am and is filed under Mortgage News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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