(Source: Smart Money By JILIAN MINCER) – For homeowners frightened by debt, paying off a mortgage has taken on new urgency — so much so that they’re opting for higher monthly payments just to be debt-free sooner. But with interest rates at record lows and property values still in flux, that may not be as admirable a goal as it appears.In the first quarter of 2011, three out of four homeowners who refinanced their mortgages paid additional money at closing in order to reduce their balance, according to Freddie Mac. Refinancers are also choosing shorter-term mortgages, which have higher monthly payments but promise debt freedom in 15 years as opposed to 30. Some 28% of borrowers who refinanced in February chose a 15-year fixed-rate loan, almost double the percentage that did so two years ago, according to CoreLogic, a data and analytics company that tracks the mortgage market.

Source: Smart Money By JILIAN MINCER

JULY 11, 2011, 9:02 A.M. ET

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