Don’t restart the 30-year clock on a refi

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

For a guy who once begged for a home loan under 12 percent, I could not believe my ears. "For people with decent credit and some equity, we're quoting fixed-rate loans in the twos." The conversation took place on a city bus, between two friends headed downtown for lunch. Local lenders soon verified the information. Better yet, family friends validated it by sharing their second-home example. Home mortgages in the twos? Uncharted territory. While 30-year, fixed-rate loans have been under 4 percent at several times this year, I underestimated the possibility of a lower rate with a shorter term. As loan terms are reduced, so is the lender's risk in extending credit, hence a lower interest rate. To confirm what I heard on the bus, I made a few calls to lenders. Mark Palmer, vice president of loan production for Seattle Mortgage, said a growing number of his refinance customers have requested 15-year and 10-year loans and a few have made inquiries on new-purchase loans...