Nearly Half of Refinancing Q4 Borrowers Reduced Payments

Nearly 85 percent of refinancing homeowners with first-lien loans maintained or reduced their current payments by paying in additional cash in the fourth quarter last year.

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Of these, according to recent analysis by mortgage giant ""Freddie Mac"":http://www.freddiemac.com/, 49 percent of borrowers slashed their principal payments by refinancing at current rates, compared with 37

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percent who preserved their payments.

""Savvy homeowners are taking advantage of some of the lowest fixed-rates in more than 60 years to lock in interest savings,"" ""Frank Nothaft"":http://www.freddiemac.com/bios/exec/nothaft.html, VP and chief economist with Freddie, said in a statement.

So-called ""cash-out"" borrowers ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô those who upped their loan balances by at least five percent ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô accounted for 15 percent of all refinance loans, the lowest percentage in the 26-year history of the GSE's analysis.

The share of activity undertaken by these borrowers has fallen in most metropolitan areas around the country, with the sharpest rates of decline taking place in Detroit and Miami.

Thirty-year loans averaged about 1.4 percent in median interest rate reductions, saving about 26 percent in interest rates. Analysis found that median borrowers typically save around $2,700 in interest payments on loans worth $200,000.

By comparison, ""cash-in"" shares rose in 10 major metropolitan areas, Freddie found.