According to Freddie Mac's latest third quarter cash-out refinance analysis, 33 percent of homeowners who refinanced their first-lien home mortgage lowered their principal balance by paying-in additional money at the closing table. This is the second highest "cash-in" share since Freddie Mac began keeping records on refinancing patterns in 1985. The revised cash-in share in the second quarter was 23 percent
Nothaft further commented, "When rates fall to new lows we typically see more 'rate and term' refinancers, who are looking only to reduce their interest payments, and relatively fewer cash-out borrowers. But now we're also seeing a very large share of borrowers reduce their mortgage debt when they refinance. Consumer debt across the board is down since the start of the recession, with non-mortgage consumer debt falling more than 5 percent since 2008, according to the Fed."