Borrowers who can afford higher mortgage payments, and who meet lenders’ stricter loan guidelines, often opt to replace their 30-year mortgages with shorter term loans at near-record low rates.
Making sense of the story
- The latest Freddie Mac quarterly survey of homeowners who refinanced found that more than one in three borrowers who refinanced from a 30-year fixed-rate loan opted to replace it with 15-year or 20-year mortgages at near-record low rates.
- Homeowners considering refinancing into a shorter-term mortgage must have the income or financial reserves sufficient to pay the extra money each month.
- Borrowers not only need to have the income or financial reserves, they also have to qualify for a refinance, have the credit score needed, and the home appraisal to support it.
- For some low-cost refi programs, lenders want to see at least 25 percent equity in the house. Higher FICO credit score requirements by Fannie Mae and Freddie Mac are another impediment, as both companies reserve their best rates for borrows with FICO scores of 740 or higher.
Read the full story from the Los Angeles Times: “Many homeowners refinancing mortgages to shorter terms.”
Latest posts by Renee West (see all)
- Live on the secluded Promontory bay in the Newport Harbor. Listed for $4,795,000. Generous sunny patio and your own private docks!!! - May 25, 2019
- This turnkey, Lido Village, Bayfront home features a private 100’ boat slip, one of the largest boat accommodations in Newport Harbor. Contact Renee for your private showing- email@example.com. - April 18, 2019
- European Inspired Villa in Dana Point!Offered at $7,333,333.00. Contact Renee West : firstname.lastname@example.org your exclusive tour around the Dana Point community! - April 15, 2019