As mortgage rates sink deeper into record territory, homeowners are refinancing into 15-year loans at a pace not seen in a decade, aiming to pay off their debt in time for retirement...With housing markets still troubled, the rates are mainly benefiting refinancers whose luck or self-discipline has left them with significant home equity. Purchase lending remains sluggish: The Mortgage Bankers Association says that fewer than a quarter of mortgages these days are used to buy homes.during the housing boom, few refinancers even considered shorter term mortgages, which made up just 10 percent of all refis in 2006..Now it's just the opposite-they want shorter term loans, and they're strategizing to get the mortgage payoff to coincide with their retirement. Also contributing to the trend: recent changes in the Obama administration's Home Affordable Refinance Program, which cut the fees for certain borrowers getting new loans if they reduce the term of the mortgage to less than 30 years.
The typical borrower in about the same as 2002-the last time a lot of shorter term mortgages were taken out; typically people in their 40s and 50s whose incomes had risen enough that they could afford hundreds of dollars more each month to pay off more than principal.
Comments(2)