The Real Deal Miami

Homeowners turning to 20-year loans for mortgage refi

June 07, 2010 12:45PM

While most people who took out mortgages during the financial crisis
got hit with high interest rates, an increasing number of these borrowers are now
looking to refinance into lower-rate mortgages to save money, the New
York Times reported. But for borrowers who may not want to start over
with a 30-year loan, the solution might be to refinance into a 20-year
loan. Rates on these mortgages are low enough that someone in the
third year of a 30-year loan can shave years off the payment term
without increasing the monthly payment much, if at all. By switching
to a 20-year loan, borrowers would be able to pay off their mortgages
sooner, while saving thousands of dollars in interest payments. [NYT]