The report indicates that cash-out refinance borrowers with student loan balances experienced a 10% decrease in balances, highlighting a gradual paydown trend. While average credit scores of these borrowers initially increased post-refinance, they eventually returned closer to pre-refinance levels, yet remained higher overall. Contrarily, credit card balances and utilization rates rose but stayed below pre-refinance averages. The Community Home Lenders of America emphasized the report's findings, acknowledging the positive financial impact on homeowners yet urging policymakers to address issues in the refinancing process to prevent exploitative practices.
Even though average credit scores moved back towards the pre-refinance average for both groups of borrowers, the average credit score for cashout borrowers remained elevated in the year following the refinance, the report said.
The Community Home Lenders of America (CHLA) lauded the results of the report as evidence of a positive difference in the financial affairs of homeowners.
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