What is the rate?
This is the first question that the consumer is trained to ask, however, the most important question is “What is the total interest I will pay on the loan?”
Example: 30 yr. fixed rate mortgage with a balance of $150,000 and a rate of 5% will cost you approximately $140,000 in interest. That’s a total of $290,000 you will pay for your home. The Freedom loan on average will save you two-thirds of this interest. As you can see, it’s not about the interest rate, it’s about the interest paid. The 30-yr. fixed mortgage above is a great rate but did you ever think that you would pay the bank double the amount financed.
Is the interest on The Freedom Loan tax deductible?
According to IRS publication 936, interest paid on any qualified mortgage loan used to purchase, construct or improve a home is deductible if it doesn’t exceed $1 million. Please consult your tax professional for actual deductions.
Won’t paying less mortgage interest reduce my tax deduction?
Yes and this is a good thing because every $3-$4 in interest you pay the bank you get an approximate $1 tax deduction. This is not a good long-term strategy. Think of it this way: Would you pay a higher interest rate to get more of a tax deduction? Of course not! Paying less interest means less money out of your pocket and more money toward your principle.
How long has this loan been around?
The Freedom loan concept has been around for decades. Most of Australia and about two-thirds of the United Kingdom homeowners have this type of loan. It is becoming more and more popular in the United States for consumers with good credit and equity in their home.
Why isn’t this program offered by more lenders?
It’s simple. The Freedom loan pays the lowest amount of interest to the banks because it pays off in less time. A 30-year standard mortgage is one of the most profitable loans for a bank because they know on average most people only keep their loans for 3-5 years paying little principle and mostly interest.
Is this FDIC insured?
This is a mortgage, not a savings account. Your mortgage is protected by your equity.
Am I the right customer for The Freedom Loan?
The Freedom Loan is ideally suited for the responsible homeowner who has good credit and equity in their home. We realize every homeowner’s situation is different so please call A1 Mortgage and consult with a Freedom loan specialist.
Contact us now and let us show you how to save thousands of dollars!
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