The mortgage industry has typically been driven by the 30 year loan. Due to borrower's needs to get rid of debt and the current low interest rates, borrowers are now leaning more towards the 15 year mortgage loan.
This August, applications for 15-year refinancing loans submitted nationwide through one of the largest online lenders was up 29 percent compared to August 2010. This is compared to a mere 12 percent rise in 30 year refinancing loans.
This comes to no surprise as choosing a 15 year refinancing plan compared to a 30 year can have huge beneifts for borrowers. This cuts their term in half, getting them out of debt faster so they can plan for their future easier without having to worry about another 30 years hanging over their heads.
Although there are many benefits to a 15 year refinance plan, there are a few things to think about as well. Not all borrowers will qualify as a shorter term will create a larger monthly payment and will effect their monthly debt-to-income ratio. The larger payment will of course vary depending on how good of an interest rate the borrower can get.
A good candiate for a 15 year refinance plan would be a borrower who has been paying off their current loan for at least five years, has good credit, and is financially stable and able to make a higher payment each month. If this sounds like you or someone you know, give us a call at Aapex, 704-892-5211, and check out how you stand for cutting your mortgage term in half.
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