More area homeowners going to fixed-rate mortgages

BLOOMINGTON — More homeowners these days want to close their front doors on risk. Central Illinoisans who flocked to adjustable-rate mortgages a few years ago have started to refinance to a fixed-rate mortgage, while more new homeowners have decided to start with a 30-year fixed mortgage from the get-go, Randy Clark, vice president of Busey Bank in Bloomington, said Thursday. The reasons are varied.

It’s partly because the difference in interest rates for many popular fixed and an adjustable loans has tightened to about a quarter-point, much lower than the typical three-quarters of a point found in recent years. In addition, consumers are paying attention to the nationwide horror stories on subprime loans and people who have lost their homes to foreclosures as adjustable rates increased, Clark said.

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