Borrowers who choose to refinance existing 30-year fixed-rate mortgages are likely to stay with a 30-year loan, according to third-quarter statistics released by Freddie Mac.
The study showed that 24 percent of borrowers who originally held a 30-year mortgage decided to switch to a 15-year fixed-rate mortgage. That figure is down from 30 percent in the second quarter. The majority of homeowners -- 65 percent -- refinanced into a 30-year product.
Of borrowers refinancing 15-year fixed-rate mortgages, 25 percent decided to switch to a 30-year loan, while 70 percent refinanced into a 15-year loan.
Also, 67 percent of borrowers who originally held adjustable-rate mortgages preferred the 30-year fixed-rate mortgage over other
loans when refinancing, a figure that has remained virtually constant throughout the year.
Overall, 49 percent of conventional mortgage applications were for refinancing in the third quarter, up from 43 percent in the second quarter and higher than the almost 17 percent in the third quarter of last year.
Pub Date: 12/13/98