Refinancers to Save More than $21 Billion in Interest

Refinancers to Save More than $21 Billion in Interest
Borrowers who refinanced in 2013 will save on net approximately $21 billion in interest over the next 12 months, according to Freddie Mac’s fourth quarter 2013 quarterly refinance analysis.

Of borrowers who refinanced during the fourth quarter of 2013, 39 percent shortened their loan term, up 2 percent from the previous quarter and the highest since 1992. Borrowers who kept the same term as the loan that they had paid off represented 56 percent, and only 5 percent chose to lengthen their loan term.

The net dollars of home equity converted to cash as part of a refinance remained low compared with historical

volumes. In the fourth quarter, an estimated $6.5 billion in net home equity was cashed out during a refinance of conventional prime-credit home mortgages. The peak in cash-out refinance volume was $84 billion during the second quarter of 2006. Adjusted for inflation, annual cash-out volumes during 2010 through 2013 have been the smallest since 1997.

The average interest rate reduction in the fourth quarter was about 1.5 percentage points -- a savings of about 25 percent.  More info on this page of the Freddie Mac website.

On another note, about 2 in 5 borrowers shorten their loan terms when they refinanced last year, and over 95% of refinancing borrowers chose a fixed-rate loan.

Thanks for reading; if you like it, let your friends know!
Francis

Silicon Valley real estate specialist
Detailed, local trends etc...
Current mortgage rates

Our next Ewaste and Shredding event will be April 5th, at my office:
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Los Altos

Nearly 21 million U.S. homeowners are mortgage free

With all of the problems associated with real estate, and for new homebuyers the difficulty of getting a loan, one wonders: how difficult is it to own a place in the US.  Well, taking a step back, and seeing the big picture is always a bit surprising and informative, as evidenced by the article below.

Almost 21 million Americans, or 29.3 percent of homeowners, own their homes outright, unencumbered by a mortgage, according to a recent Zillow analysis of mortgage data.

Analyzing data through the third quarter of 2012, Zillow found that 20.6 million homeowners nationwide own their homes free and clear of mortgage debt.

Among the nation's 30 largest metro areas included in the study, Pittsburgh, Tampa, Fla.; New York, Cleveland, and Miami had the highest percentage of free-and-clear homeowners. Washington, D.C., Atlanta, Las Vegas, Nev.; Denver, and Charlotte, N.C. had the lowest percentage.

It is good to keep things in perspective.

Thanks for reading!

Francis

Silicon Valley real estate

Stats, smart graphs etc...

Current Mortgage rates

Refinancing? Current loan limits expire this week...

Current loan limits expire this week (today on Friday).

Current conforming loan limits are scheduled to expire Friday, Sept. 30. The maximum FHA, Fannie Mae, and Freddie Mac conforming loan limit will decline to $625,500 beginning Oct. 1, 2011, from the current $729,750 limit, though the majority of counties will fall far below the $625,500 maximum.

The conforming loan limit determines the maximum size of a mortgage that FHA, Fannie Mae, and Freddie Mac government-sponsored enterprises (GSEs) can buy or guarantee. Non-conforming or jumbo loans typically carry a higher mortgage interest rate than a conforming loan and require a higher down payment, increasing the monthly payment and negatively impacting housing affordability for California home buyers.

An estimated 30,000 people will be impacted in California by this new limit.
If you are thinking of refinancing, or a purchase, I can certainly help you choose a reliable, professional lender.

Francis Rolland
Silicon Valley real estate
Local real estate links.

►worthy to note: our next E-Waste collection and shredding event: 10/22/11
at: 161 S. San Antonio Rd, Los Altos, CA 94022.
It's easy, it's free, it's green!  Stop by for free shredding service and bring your electronic recyclables with you!  TV's, cell phones, batteries, computer stuff.... ;-)