No. of Recommendations: 6

You wrote, "As mortgage interest rates fall further into uncharted territory, more homeowners in Massachusetts and across the United States are refinancing home loans to shorter terms, paying off their debts faster and saving thousands of dollars.

Economists say the trend indicates that lowering long-term debt has become a bigger priority for many borrowers than cutting monthly mortgage payments."

This will create a stronger consumer in the next few years IMHO.

I guess I'm bucking the trend here. My last mortgage (refi) was a 10yr FRM back in '03. I'd paid off about half of the loan when I sold the place.

Now I'm buying another place with a 30yr FRM with 20% down - going further into debt than I've ever been. Of course it helps that the new rate is almost a full point below my 10yr FRM. Thank you Bernanke!

Without these low rates, I'd probably be too intimidated to own a place in the Seattle area, so I'd be back to renting or I'd not have made this move. (Of course you could also argue that these prices are a result of low interest rates, so it could mean I've over-paid for this place - assuming rates are headed back up soon.)

Of course the payments (PI + Escrow + HOA dues) on this place are only going to be 55% higher than the payments on my first home back in 1988. If I were to adjust my payments back to 1988 dollars, the cash flow requirements for this place are only about 82% of my first place's.

I was also going to make a snide comment about wishing my wages had kept up with inflation. But then I went and ran the numbers and found that my current wage is in fact comparable to my 1988 wages. My wages have kept up with inflation - but only because I got a cost-of-living adjustment when I accepted this latest position. So I had to move to Seattle where it's like 35% more expensive to live in order to make what I made in 1988, if you adjust for inflation.

Well thank goodness my other expenses are so much lower these days...! :-)

- Joel
Who thinks it's so much prettier here than north Texas...
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