NEW YORK – Feb. 4, 2014 – Wealthy borrowers increasingly shun 30-year mortgages, taking advantage of the lower rates offered by short-term loans to save thousands of dollars in interest.
CoreLogic reports that 30-year mortgages accounted for just 90.3 percent of private mortgage originations from January through November 2013, marking a seven-year low. At the same time, 15-year mortgages rose to 9.1 percent of private mortgage originations from 8.9 percent during the first 11 months of 2012, marking a seven-year high.
As 30-year mortgage rates rise, opting for shorter-term loans enables affluent borrowers to free up cash for other investments or makes it possible for baby boomers to pay off their mortgages before retirement. Lenders such as Wells Fargo increasingly are offering 10- and 20-year home loans.
Source: Wall Street Journal (01/31/14) P. M4; Andriotis, Annamaria
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