Low rates make 15-year mortgages more attractive
09/17/2010
By Credit.com Staff
Many families are trying to save money on their mortgage payments by refinancing their homes. Although most extend their mortgage to 30-year terms to lower their monthly bills, a new trend shows a higher number of homeowners are turning to 15-year mortgages to take advantage of low rates.
The most recent rates for 15-year loans averaged at 3.82 percent last week, a 19-year low, according to data from Freddie Mac. In addition to securing a lower rate, more Americans are trying to pay down their mortgage debt quickly to own their homes free and clear. Homeownership will not only eliminate a monthly bill, but give consumers equity to fall back on in the event of another economic collapse, the Los Angeles Times reports.
"If their retirement income and savings fall short, they at least can count on their mortgage being paid off earlier," mortgage banker Stevenson Ranch told the LA Times.
The government recently increased its efforts to provide more programs and initiatives that make homeownership more affordable for Americans. Despite the push, foreclosure filings continue to increase, rising 4 percent in August.
