No let-up in re-financing in 2006

Re-financing was the mantra last year, interest rates fell to record lows, and borrowers made lower monthly payments. Now interest rates are moving up but the fascination follows into 2006 as refinancing accounted for as much as 40 percent of mortgage applications last month, the Mortgage Bankers Association reported.

Freddie Mac is forecasting that when the numbers for 2005 are tallied, homeowners will have converted $204 billion of equity into cash, up from $142 billion in 2004. If you need a new roof or a more energy-efficient furnace, a cash-out is a cheaper way to access credit to do home improvements, said Frank Nothaft, chief economist for Freddie Mac.

Read more on the popularity of refinancing in 2006 here.