Cash-out refinancings, where homeowners take out 5 percent or more of their home's equity, rose to 57 percent in the second quarter, according to Freddie Mac, the federally chartered company that supplies funds to lenders by purchasing mortgages.
That figure is up from the first quarter's 52 percent, but down from last year's second quarter, where 81 percent of refinanced loans were for amounts greater than 5 percent of a home's equity.
With a cash-out refinanced loan, the new loan exceeds the total amount of money needed to repay the existing first mortgage and any additional lien. The borrower then receives the cash balance of the loan to use for other expenses.
