Mortgage Saving Phenomenon
How Nearly 1 Million People Could Use Obscure Government Program to Save Big on their Mortgages
Most economists believe that the federal reserve is on the brink of increasing interest rates and that mortgage rates could shoot up as a result. Yet many consumers haven’t refinanced and locked in a historically low mortgage rate for the next 30 years, and that could cost them $25,000 or more.
Most people don’t know about this little known government program called the Home Affordable Refinance Plan®, or HARP, which enables Americans to save big on refinancing.
HARP allows people – even those with lower credit or homes that are “underwater” - the opportunity to refinance at surprisingly low rates, which could reduce their monthly payments. The average reduction was a savings of about 33% last year. On a $200,000 loan, that translates to an average savings of $4,100 in the first year alone. With rates as low as they are, 39% of homeowners were actually able to shorten their loan terms as well.
What’s more: over 700,000 people qualify and haven’t taken advantage of this program.
So How Do You Easily Compare Lenders?
Simple. LendingTree's mortgage comparison shopping service makes it easy. The free service connects you with up to five competing banks, and you can use it to pit each bank against the others. This way you can walk away from the process secure in the knowledge that you're one of the smart shoppers, and got the absolute best loan you could get.
One last note. Given the fact that interest rates are near all-time lows (we've seen recent rates as low as 2.97% APR on a 5/1 ARM), and that they've been creeping upwards recently, waiting may not be the smart move. But seizing the chance to comparison shop before rates go up any further definitely is.