This Isn’t Your Father’s Cash Out Refi

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Posted To: MND NewsWire

The share of cash-out refinances spiked in 2017 and 2018 in a manner similar to what happened just before the Great Recession. The share jumped to 50 percent in 2017 and 61 percent in 2018, the highest since 2006. In two posts in CoreLogic’s Insights blog however Arthur Jobe maintains that the current surge is nothing like that earlier one. They differ by credit quality, dollar volume, and borrower characteristics and therefore present much less risk this time around. The volume of both cash-out and non-cash-out loans increased in 2015 and 2016 as borrowers enjoyed a two-year window when decreasing interest rates and continued home-price growth offered ideal conditions for refinancing. In 2014, when the spike in cash-out refinances started, the volume had fallen to a 17-year low. Jobe says…(read more)

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