Question: But I do not want to be shackled to a lender for 30 years – 30 years, >>think about it!
>Well, you’re not shackled to them — you can get rid of them at any time >by refinancing, paying them off, or selling. Most people do one of >these things within 5-7 years.
Answer: I don’t think that’s quite accurate. Most MORTGAGES are paid off by one of the methods you mention in that time frame and that’s been the case for at least my lifetime. But most people who buy a house don’t do that. A relatively small percentage of more mobile than average people pay off the mortgage when they sell the house and move. But most people don’t move every few years and end up with the mortgage for the life of the mortgage.
The picture may have changed somewhat in recent years with the plunge in interest rates and the wave of refinancing that came about as a result. But that’s temporary and even with the recent small uptick in rates refinancings have declined slightly. At some point, rates will rise to “normal” levels (whatever those are) and most if not all people who started out with high rate loans will have converted them to low rate loans and the refinancings will diminish. We’ll be back to the usual situation – most PEOPLE who take out a home loan will eventually pay it off on the loan schedule, and a relatively few people who move fairly often will skew the numbers enough so that most MORTGAGES will be paid off long before term.
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