Shorter Term Home Loans Become More Popular With Record Low Interest Rates
As has been documented by the media in recent weeks, we are once again at or near historical lows when it comes to home loan interest rates. Of course, as we have addressed in other articles, the balances of their current home loans, in relation to the values of their homes, has kept them from refinancing to take advantage of lower rates.
However, for some current homeowners who have equity or perhaps qualify for on the government initiatives, such as the Fannie Mae refinance plus program (allowing homeowners with Fannie Mae owned loans with little or no equity to refinance), now is the time to once again considering completing a refinance to lower interest rates to levels that may not been seen again for years to come.
That is because with interest rates so low, if you can afford it financially, it now may make sense to take advantage of super low rates on 20, 15 or 10 year fixed loans and shorten the payoff term of your home loan, saving a great deal of interest over the life of the loan.
For many homeowners, they see now as the time to take a short term fixed mortgage, as opposed to a conventional 30 year fixed loan, and stick with it for the lifetime of the loan, as current interest rate levels may soon be gone for good. For those homeowners who can afford the higher payment that a 15 year fixed loan provides as opposed to a 30 year fixed home loan, now may be the time to consider to refinance one last time and commit to pay off the mortgage.