More homeowners shorten mortgage terms USA Today
Spurred by low interest rates and a desire to pay off their debts, homeowners are shortening the terms of their loans. In the first quarter, 34% of refinancers switched to a 20- or 15-year loan, the highest level in seven years, according to mortgage giant Freddie Mac . At LendingTree, an online mortgage broker, requests for 15-year mortgages are up 30% from a year ago, says Mona Marimow, vice president of marketing.
Quicken Loans recently launched Yourgage, a customized product that allows borrowers to select the term of their mortgage. The most popular term for Quicken borrowers? Eight years. The second most popular is 13 years.
STORY: Mortgage rates reach record lows, sparking refinancings STORY: Economists see 30% chance of recession"Mortgage-burning parties are back," says Bob Walters, chief economist for Quicken Loans.
In one sense, this trend bucks conventional wisdom. The average rate for a 30-year, fixed-rate mortgage was 4.32% last week, close to a record low, according to Freddie Mac. That's cheap money, especially when you factor in the tax deduction for mortgage interest. Some financial planners might argue that you're better off keeping your payments as low as possible — which usually means sticking with a 30-year mortgage — and investing the balance.
Guidelines to Refinance a Home Loan
With the current economic meltdown and the prolonged slump in the housing market, millions of consumers across the country are refinancing their mortgage each year. If you are also looking forward to refinance a home loan at a substantially lower interest rate, you must consider a few crucial factors first. Remember, if you have stellar [...]
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