Cashing out.(ViewPoint: MarketWatch)

Remodeling, September, 2005

Cash-out refinances were a major boon to the remodeling industry during the boom period that began at the beginning of this century. With interest rates steadily climbing higher from their all-time lows of a few years ago, however, refi's have been considered something of a dead source of remodeling activity. But second quarter data from Freddie Mac indicates that conditions may be favorable for a resurgence of remodeling financed by homeowners reworking their mortgages.

In the second quarter of this year, 74% of all refinanced loans resulted in a loan amount that was at least 5% higher, meaning that the majority of people refinancing are doing so to take cash out, not to get a lower rate. Kermit Baker of the Joint Center for Housing Studies at Harvard...

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