More refinancing homeowners put cash in, not take it out

WASHINGTON — Thinking of cashing out some equity when you refinance your mortgage? Sure, that used to be what millions of homeowners did when they needed extra money.

But now get ready for the post-boom, post-crash trend that’s really hot: “Cash-in” refis — the diametrical opposite of cash-outs.

“It almost sounds un-American,” quipped Frank Nothaft, chief economist for mortgage giant Freddie Mac.

After all, Americans have grown accustomed over much of the past two decades to tapping into their equity — pulling out a chunk of cash and adding to their debt load — when they refinanced their mortgages. “Almost nobody thought of putting money back in,” Nothaft said.

Cash-outs hit their highest level of popularity during the wild appreciation streaks in the early and middle years of the last decade.

In mid-2006, just before home values began deflating across the country, the rate of cash-outs hit 88 percent, according to Freddie Mac, which monitors refinancings quarterly.

This meant that nearly nine of 10 refinancers whose loan files were sampled by Freddie Mac increased the size of their mortgage balance by at least 5 percent in the process.

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