Cash-out refinancing is being increasingly used by borrowers and homeowners looking to renovate their homes, consolidate debt, make a purchase, or even as a down payment for a second home, according to a study by LendingTree.
According to the data of this study, cash-out refinance loans have risen to 62 percent of all refinancing in the first quarter of 2018 from 54 percent during the same quarter last year. To find out which cities and regions had a greater ability to access cash through refinancing a mortgage, LendingTree analyzed mortgage requests and offers for refinance borrowers between March 1, 2017, and March 1, 2018, based on the location of the property to be mortgaged.
It then based the rankings on the percentage of total refinance mortgage funded that included a cash-out portion of the loan. Albany, New York had the highest share of cash-out borrowers with an average loan amount of $166,504 and 73 percent of the refinance mortgages funded with a cash-out portion, the study indicated.
In the second place, Portland, Oregon had 72 percent of refinance mortgages being funded with cash-out portion and was tied with Cape Coral in Florida on the percentage. However, the average loan amounts varied with Portland and Cape Coral recording average loan amounts of $266,152 and $162,975 respectively.
Boise City, Idaho; Scranton, Pennsylvania; Denver, Colorado; Greenville, South Carolina; Colorado Springs, Colorado; and Tulsa, Oklahoma also made it to this list. Three cities tied for the tenth place in the rankings. They included Des Moines, Iowa; Grand Rapids; Michigan; and Ogden, Utah.
When it came to highest cash-out loan amounts, the average borrower in Bridgeport Connecticut took out a loan of $453,307 earning it the first spot on this list. San Jose, California followed with an average loan amount of $451,777.
Neighboring San Francisco came in third with an average loan amount of$442,099. Honolulu, Hawaii; San Diego, Los Angeles and Oxnard, California; Washington, D.C.; Seattle, Washington; New York, New York; Boston Massachusetts; and Denver, Colorado rounded off this list.
The study found that while loan amounts clearly lined up with cities that had higher home values, no data was available on cities with the most cash-out refinance borrowers.