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Asset Preservation Advisors


State: GA

APA’s philosophy is to work closely with our clients to develop an in-depth understanding of their unique needs and objectives. We then customize a municipal bond portfolio that best meets their specific goals and needs. APA manages high quality municipal bond portfolios in four strategies: Short-Term, Intermediate-Term, High Income, and Taxable.

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Fixed-Rate Mortgages Near Unanimous Option for Refinancing Borrowers: Freddie Mac

| BY Donald Liebenson

Fixed-rate loans accounted for more than 95 percent of refinance loans in the first quarter of 2012, according to Freddie Mac’s Quarterly Product Transition Report released Monday.

Of borrowers who refinanced during this period, 31 percent reduced their loan term by paying off a 30-year loan and replacing it with a 20-year, 15-year, or other shorter term loan. In addition, 65 percent of borrowers kept the same term as the loan they had paid off.

Sixty-eight percent of borrowers who had a hybrid adjustable rate mortage chose a fixed rate loan during the first quarter, the highest share since the first quarter of 2011, while the remaining 32 percent chose to refinance into the same type of product, the report found.

"Fixed mortgage rates averaged 3.92 percent for 30-year loans and 3.19 percent for 15-year product during the first quarter in Freddie Mac's Primary Mortgage Market Survey®, well below long-term averages,” said Frank Nothaft, Freddie Mac vice president and chief economist in a statement.

Freddie Mac had previously reported that 79 percent of homeowners who refinanced their first-lien home mortgage in the first quarter of 2012, either maintained about the same loan amount or lowered their principal balance by paying-in additional money at the closing table. Of these borrowers, 58 percent maintained about the same loan amount, and 21 percent of refinancing homeowners reduced their principal balance; the share of borrowers that kept about the same loan amount was the highest in the 26-year history of the analysis.

“The typical borrower who refinanced reduced their interest rate by about 1.5 percentage points,” according to Freddie Mac. “On a $200,000 loan, that translates into saving about $2,900 in interest during the next 12 months. “

About the Author

Donald Liebenson

Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.  

A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.