Little Known Mortgage Payoff Eliminates Up to 15 Years of Payments
Banks Won’t Tell You This Powerful Savings Strategy. Here’s how it works.
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Pay Faster To Save A Ton
A mortgage is officially repaid when you pay back what you borrowed – the principal. But, the amount of interest you’ll hand over to the bank is greatly affected by how long it takes you to make that final payment. In other words, you’ll get to hold on to a lot more of your hard-earned cash by doing one thing: paying your mortgage off faster. If you’re in a 30-year mortgage, switch to a 15-year. Sound intimidating? It’s not — we’ll show you how.
Do The Math (The Banks Wish You Wouldn’t)
It’s a simple equation, but bankers don’t want you to solve it. After all, big banks make millions of dollars from interest. Avoiding it is not something that’s in their interest (pun intended) to do.
Have you ever noticed the interest accrued on your credit card, automobile or student loan statement and been shocked by the total you see? It happens to people every day! Take this account from a borrower writing on morningfinance.com: when he put pencil to paper, it turned out that 72% of the monthly payment on a 30-year mortgage was going straight to interest. By switching to a 15-year mortgage, he could save $159,447.09 in pure interest.
Compare Rates To Secure The Most Savings
By now you understand that your savings are reliant on your interest rate. There’s only one way to ensure that you get the best interest rate available, and that is to compare rates from banks all around the country. Sound impossible? Not with LendingTree. LendingTree makes banks compete for your business. The LendingTree website is fast, the service is free, and the results are yours with no obligation. What are you waiting for? Cut your 30-year mortgage in half today and thank us later.
Here’s How You Do It
Step 2: Once you go through a few questions, you will have the opportunity to compare the quotes from multiple lenders!
Average monthly savings from http://www.freddiemac.com/finance/pdf/RefiReport2013Q3.pdf>.
State of the Union transcript – http://www.whitehouse.gov/the-press-office/2012/01/24/remarks-president-state-union-address. Further information for this can be found at http://www.nytimes.com/2011/08/21/realestate/exploring-the-15-year-loan-for-refinancing-mortgages.html
Under provisions of the Making Homes Affordable Act(a.k.a. HARP 2.0), signed into law by President Obama, Fannie Mae has removed certain loan refinance requirements for qualifying loans including the Loan-To-Value (LTV) ceiling for fixed-rate mortgage, property appraisal, minimum credit score & credit check, and eliminated & lowered certain fees for borrowers making it easier to refinance into a lower rate mortgage, effectively reducing the amount of interest paid (and owed) over the life of the loan. More info: http://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Fannie-Mae-and-Freddie-Mac-Announce-HARP-Changesto-Reach-More-Borrowers.aspx
A shorter term mortgage enables such borrowers to pay down the amount they owe much faster than a traditional 30-year mortgage. Furthermore, interest rates on shorter term mortgages usually are less than on thirty-year mortgages. More information can be found at http://harpprogram.org/faq.php The Making Home Affordable Program is set to expire September 30, 2017 and is free http://www.makinghomeaffordable.gov/about-mha/Pages/default.aspx but standard refinance fees will still apply. http://www.whitehouse.gov/the-press-office/2012/02/01/fact-sheet-president-obama-s-plan-help-responsible-homeowners-and-heal-h
On a $200,000 loan, a homeowner in a 30 year fixed at 6.25% would end up paying the bank $443,316. That same homeowner, if they switched to a 15 year fixed at todays rate of 3.58% APR would own their home for only $250,779
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