More borrowers choose shorter term loans

Some of the low interest rates in history have prompted more home owners to shorten the terms of their mortgages.

Thirty-four percent of refinancers changed their loan to a 20- or 15-year mortgage during the first quarter — the highest level in seven years, Freddie Mac reports.

Mortgage companies are also reporting a higher demand for shorter-term mortgages. For example, LendingTree reports that 15-year mortgages have increased 30 percent from a year ago.

Quicken Loans recently debuted a product that allows borrowers to select the term of their mortgage. The most popular mortgage term selected is 8 years, followed by 13 years.

However, some borrowers who want to refinance are finding they’re being shut out, experts say. Homeowners who don’t have a credit score of 720 or higher or don’t have at least 20 percent in home equity may not qualify for the lowest rates.