Traditionally, 30 years has been the preferred financing method when applying for a loan for home. However, the Federal Reserve and the government have adopted a series of measures in order to reduce the negative impact on the taxpayers’ equity. All these due to the way housing market has been affected by the economic situation nowadays.
Incentives like the loan of $7,500 that later on turns on $8,000 has been created. In addition, the government has tried to motivate the customers through the reduction of interest rates ever. This procedure offers to the customer the opportunity to own a property “Free and clear” in a half of time by refinancing the mortgage from 30-years to 15-years.
For instance, a customer from real life bought a house two years ago. He got an stable interest of 5.5% for 30 years with a monthly payment of $950. He can now refinance his mortgage and to get a 4% interest with a payment near to $1,120. That is a little less than $200/month, which means that he is saving over $80K in interest, and more importantly, his house is going to be fully paid in a half of time. Something that once seemed an impossible dream!
There are some strategies to reduce the mortgage time even more…
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