We usually think of 30-year mortgages as the basic pillars of real estate finance but do we really need fixed-rate loans that last three decades?
The truth is that most loans never make it 30 years or even come close. Mike Fratantoni, chief economist with the Mortgage Bankers Association tells RealtyTrac that it’s tough to figure out the average time a loan is outstanding because the number is a moving target. “During refi booms,” he says, “it becomes very short. As rates rise, it gets very long. It is difficult to predict just how long the average life will be. On average, people move every seven years, but that is made up of young people who move a lot and older people who don’t.”