When purchasing a new home, more than 90% of buyers opt for a 30-year fixed rate mortgage. This type of mortgage is affordable, flexible and easy to keep track of. Because borrowers are locked into a rate, it’s also a stable option that won’t end up costing more unexpectedly in the future.
But what if buyers opted to take on a mortgage that was half the life-span of the current norm? Financial expert and CNBC host Suze Orman agrees with such a tactic. “I wish more people would take out a 15-year mortgage instead,” she writes in one of her blog posts.
The reason Orman favors a shorter term loan is simple: It’s cheaper. In March, “the average rate for a 30-year fixed rate was 4.3 percent, while a 15-year [had] an average fixed rate of just 3.5 percent,” she wrote. “That’s nearly a percentage point less!”
A 1 percent variance can actually make a huge difference. On a $250,000 loan, paying 4.3 percent for 30 years amounts to $195,000 in interest, according to Orman, while 15 years at 3.5 percent comes out to only $72,000. That’s more than $100,000 in savings.
The shorter term loan amounts to huge savings when the rates are similar as well. On a $250,000 mortgage, you’ll pay $78,000 in interest over the full term of a 15-year plan and $169,000 for a 30-year plan, even if they both offer 3.8 interest rates.
However, a 15-year mortgage isn’t the right choice for everyone. While the lower interest rate saves money in the long term, the monthly payments are much higher, which simply isn’t possible for many families.
But now there is even more help out there. After a few years, you can refinance your home. Homeowners who visit LowerMyBills’ website have been surprised to discover they are eligible for a program that has the banks on edge. In the last 70 years, there has been no better time to refinance your home.
A Little Known Government Program Called the Freddie Macs Enhanced Relief Refinance® (FMERR) Gives Homeowners The Chance To Refinance Their Homes At Surprisingly Low Rates & Lower Their Mortgage By An Average Of $6,500 A Year
The Homeowner Stimulus Package
Most homeowners don’t know this, but if your mortgage is $650,000 or less, you likely qualify for this program. The government wants to lower your rates, so you can have more money. This is smart because when you have more money, you can help the economy. However, the banks are not happy about this because…..
- You Can Shop Lenders Who Give You ALL The Senior Discounts You Qualify For
- Your Home’s Loan-To-Value (LTV) Can Be 80% to 125%
- The Average Homeowner Has Saved $391 A Month. What Could You Do With An Extra $391 A Month?
- The Average Homeowner Not Only Saves Monthly, They Can Also Shorten Their Term
The FMERR program uses the power of “interest” to help you lower your payment or shorten your term. Homeowners never get a break. Well for the next 3 months you finally get one of the biggest breaks in your life.
This program is the best way for you to lower your payment, put the money you save towards the principal and pay your mortgage off faster. The best part is you will save tons of money on interest over the life of the loan.
How Do You Find Your Rates?
Here’s how you do it. There are a few websites out there that will help you compare the mortgage rates. The problem is they do not give you quotes that include the FMERR program AND the senior discounts you qualify for.
LowerMyBills is the best site we have seen for homeowners. It includes the FMERR program, all your discounts and is user friendly. In addition, we surveyed over 1000 homeowners who recently took advantage of the FMERR program and LowerMyBills came out on top with a 97% approval rating.
The best part is unlike many other websites, the service is fast, easy and FREE. For once, homeowners have nothing to lose and everything to gain.
Act Now While You Have Time
- Simply select your age below
- After you enter some information about your home, you will be on your way to saving tons of money by refinancing. Put money in your pocket and enjoy!
Select Your Age To Check If You Qualify:
Customer Service Available Monday-Sunday From 9am-9pm Eastern Time Zone.
THIS IS AN ADVERTORIAL AND NOT AN ACTUAL NEWS ARTICLE, BLOG, OR CONSUMER PROTECTION UPDATE
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Suze Orman story originally reported on cnbc.com.