In the first quarter 2011, 34 percent of those who refinanced switched to a 15- or 20-year loan term from a 30-year term, which is the highest level since 2004, according to Freddie Mac. A vice-president at Lending Tree said requests for 15-year mortgages has increased 30 percent in the last year. And Quicken Loans reports that the most popular loan term in their new Yourgage program (which allows borrowers to select their desired term) is eight years, followed by 13 years.
In fact, rates are so low that some borrowers could switch to a 15-year term at 3.5 percent from a 30-year term at 6 percent and not see their payments go up. However, not everyone can qualify to refinance. Borrowers usually need a credit score of 720 and at least 20% equity in their home to obtain the best rates. If you don't qualify, you can always make extra mortgage payments in order to pay down your principal more quickly.
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