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Refinancing Home Loans 2011 |
September 2011 - Does it make sense to refinance? Many home owners have
their home loans at 6.65 percent. If you are looking to refinance, it
may be a no-brainer. Even if you close with a no-closing cost route,
accepting a slightly higher interest rate for paying nothing at closing,
you may end up with a rate far lower than what you currently have. This
scenario also has options, the option to shorten the term of the loan
to a 10, 15 or 20-year mortgages.
For home loan interest rate-chasers who may have refinanced several times, the answer isn’t quite as simple. Refinancing makes sense if they can pay no closing costs and still reduce their rate. But it’s a hassle, and before you start the process, consider that the difference in monthly payment may only buy you a shovel. For example, the monthly principal and interest payment for a $170,000, 30-year, fixed-rate mortgage at 4 percent is $811. Increase the rate to 4.25 percent and you’d save only $25 a month. Is it worth the hassle of the appraisal and paperwork to save that little?
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