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According to recent reports, more consumers have opted for 15-year loans to refinance their mortgages, bypassing the long-standing preferred choice of 30-year offerings.
In August, the number of applications for 15-year refinancing loans nationwide increased 29 percent from the previous year, according to a mortgage website. For 30-year loans, refinancing applications were up 12 percent.
"It's all the trend right now," Kristine Marr, a senior loan officer, told the Contra Costa Times. "Most borrowers are asking about switching to a 15-year-loan. Everybody's in a mood now to get those mortgages paid off. They want to see an end to those payments, and that's what's driving it."
Opting for 15-year refinancings can provide consumers with considerable savings in terms of interest payments. However, the loans require larger monthly payments than those under 30-year terms.
The Contra Costa Times report explains that retirement considerations have played into the new trend, as homeowners are attempting to build equity faster. Many homeowners don't see a 30-year investment as a wise move if they plan to retire in 20 years, said one mortgage expert.
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