“Mortgage borrowers continue to refinance their mortgages at a higher frequency than historically would have occurred given the rise in mortgage rates over this year,” said Frank Nothaft, Freddie Mac vice president and chief economist. 

 “But the wide proliferation of adjustable-rate mortgages (ARMs) originated in the past few years that are nearing their first interest-rate adjustment provides borrowers an incentive to refinance into a lower-cost ARM or fixed-rate mortgage.  In addition, borrowers who might have considered a prime rate home equity loan for a home improvement or other need are turning to cash-out refinance options now that the prime rate is above 8 percent.

The Cash-Out Refinance Report also revealed that properties refinanced during the third quarter of 2006 experienced a median house-price appreciation of 33 percent during the time since the original loan was made, down from a revised 34 percent in second quarter 2006.  For loans refinanced in the third quarter of 2006, the median age of the original loan was 3.4 years, about two months older than the median age of loans refinanced during the second quarter of 2006.

 - http://originatortimes.com