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Douglas Zeller's Blog

By Douglas Zeller | Broker in El Dorado County, CA

California Real Estate Loans - Talking Points!

Today’s record-low mortgage rates have a lot of homeowners debating whether to refinance into 15- or 30-year mortgages, but few realize lenders offer products with all sorts of repayment periods, from five-year “balloon mortgages” to 29-year loans.

Fifteen- and 30-year mortgages do make up the bulk of the market, but the Mortgage Bankers Association says some 15 percent of consumers who refinanced in May chose nonstandard products – generally 10- or 20-year loans.  About 2 percent of home buyers also choose such loans for purchase mortgages.

Quicken Loans offers one of the best-known home loans with nonstandard repayment terms, a product called “Yourgage.”

Yourgage lets consumers choose anything from eight-year loans to 29-year loans.  According to an executive with Quicken Loans, the most popular choice among Yourgage customers are eight-year mortgages, with 29-year loans coming in second.

Another alternative is taking out a 30-year loan and adding a little extra principal to the bill whenever possible.  That doesn’t lock the borrower into a higher monthly bill, but does allow him to pay down the principal balance of the loan.

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