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AVP58

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What factors should you consider on to refinance or not
I'm thinking about refinance. What factors should I consider before I decide. I know it will add more time to the mortgage.So is it worth it.Or with the housing situation should I not concern about paying it off if it's not worth what I paid for it.

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Factors for refinancing

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First, prioritize your needs. Do you want a lower monthly payment, earlier payoff, or lower total interest paid?
Second - Determine how long you think you will remain in the home.
Third - determine the TOTAL cost to refinance. You may need to obtain a "truth in lending" statement before really knowing this answer. No one will really give you a "zero cost" refinance - it may be hidden, but its in there.
Forth - Determine all savings and how they impact you. Ex. if you lower you payment by $100 per month, but closing costs on the refinance is $2400, it will take two years to pay it back. In addition, you're now going to be paying that lower rate for a longer period of time, so you want to look at total interest vs. remaining interest of your existing mortgage.
If you're looking at an early payoff, evaluate the difference between the rates. You can always pay a 30 yr loan off early, but you will have the flexibility of a lower monthly payment just in case your financial situation changes.
As for making early payments: If you have a solid savings account (6-8 months of expenses saved), go for it. If not, focus on building your savings first.
Lastly- when quote you a "new payment", be sure you are comparing apples to apples. Often they only give you the cost of the loan, not insurance and taxes. And NEVER sign up for a variable rate. You do not want your mortgage to be "like a box of chocolates".

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