The Wall Street Journal reports that a growing number of people are opting for 15 year mortgages rather than the more conventional 30 year term. During all of 2009, almost twenty percent of all borrowers chose the shorter term. www.wsj.com/article/SB100014 While this is driven by historically low interest rates, and is obviously a strategy that can only be utilized by someone with a few extra bucks each month and equity built into their home, perhaps there is more to it than meets the eye. According to Bob Walters, the chief economist of Quicken loans, this is an indication of a different psychology about debt. In recent decades, a common strategy was to take on the largest mortgage one could handle and use some of that money for other investments. The trend nowadays is to get rid of the personal debt as quickly as possible. After the past two year’s events, it’s one of those things that sound so logical, it’s hard to remember the counter-argument.
By Myron Gushlak
