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More credit-worthy homeowners opt for shorter-term loans

A growing number of creditworthy homeowners with steady jobs and sufficient savings to lock in low interest rates are opting for shorter-term loans, according to Stuart Feldstein, president of market research firm SMR Research, Bloomberg News reported.

The portion of borrowers refinancing in January who took 15-year mortgages rose to 29 percent from 11 percent two years earlier, according to recent data from CoreLogic, while mortgages with 30-year terms accounted for only 52 percent of refinancings in January, down from 80 percent in January 2009.

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The share of cash-in refinancings reached a record of 44 percent in the fourth quarter of 2010, according to data from Freddie Mac dating to 1985, almost double the quarterly average over the past 26 years.

“They are people who — rather than waiting for home values to rise — are taking matters into their own hands,” Feldstein said. “They are building equity on their own.” [Bloomberg]

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