Half Of 1Q Mortgage Refis Cut Interest Rate 20% -Freddie

   DOW JONES NEWSWIRES 
 

Half of borrowers who refinanced their mortgages in the first quarter lowered their annual interest rate by at least 20%, according to Freddie Mac's (FRE) quarterly refinancing report.

That comes despite the tight credit markets, which have made it difficult for many consumers to get the approval to refinance. But the big rate declines are amid come mortgage rates for conventional 30-year fixed-rate loans hitting 50-year lows in the period, averaging 5.06%.

It has since continued to fall - Freddie Mac earlier Thursday reported the average rate for such loans was 4.78% this week.

Freddie Mac Chief Economist Frank Nothaft said the payment savings from refinancing done in the quarter is about $160 a month on a $200,000 loan. He added if the pace keeps up for the rest of the year, homeowners will save about $10 billion in mortgage payments in their first year after refinancing.

The report said 58% of prime borrowers who refinanced a conventional mortgage either kept the same principal balance or reduced it, up from 45% in the fourth quarter.

The company saw a rise in the volume of home-equity loans and lines of credit that were rolled into a new first-lien mortgage during the quarter.

Nothaft said earlier Thursday the housing market may be edging toward a bottom as existing-home sales for March stayed near their four-month average and new-home sales beat expectations.

-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089; [e-mail]