Freddie Mac: 46 Percent of Mortgage Refis 'Cash-in'

Nearly half of homeowners that refinanced their home mortgages in the fourth quarter of 2010 opted for "cash-in" refinancing, paying down the principal to achieve lower interest rates or avoid mortgage insurance.

The 46 percent who did so are the highest number since Freddie Mac started keeping records in 1985. The 16 percent of borrowers who took cash out when they refinanced was also a record low. The average over the last 25 years has been that 62 percent of homeowers took cash out at closing.

“Early in the fourth quarter mortgage rates on 30-year fixed-rate conforming loans were at very low levels, the likes of which haven’t been seen in more than 50 years," says Frank Nothaft, Freddie Mac's chief economist. "This encouraged borrowers who could do so to refinance, and many looked at their other investment options and chose to pay down a bit of their mortgage at the same time."