Refinance Mortgage
If you purchased you home when interest rates were higher, re-financing
your mortgage can help you to reduce your overall debt, while at the
same time lower your monthly bills. If your current mortgage rate is
at least 2 percentage points higher than the prevailing market rate
it is usually worthwhile to refinance your home. This takes into account
the costs associated with refinancing.
The length of time you plan on staying in your current home is also
a factor in deciding to refinance. It takes about three years to "break
even" from a refinance, so if you plan on moving sooner than three
yaers it may not be worthwhile. If you plan on staying in your home
for much longer it may even make sense to refinance if the current interest
rate is only 1.5% lower than the rate you are paying.
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