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What is refinancing?

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28th Oct 2009 by JonB

Refinancing is simply replacing your current loan with a new one. If you have a 30 year mortgage at 6%, but rates have dropped to 5% it may be worth it to get refinance and get a loan with the lower rate.

Also, if you have equity in your home, you could refinance and turn some of that equity into cash to use for whatever you wish. This is typically referred to as a "cash-out refinance'.

When you refinance, you always want to take into account all the costs associated with getting a new loan when deciding whether it makes sense financially. For example, you may be able to get a lower rate, but if you have to spend $4,000 in closing costs it may not be worth it, especially if you might move in a couple years.





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27th Oct 2009 In Finance 1 Answers | 563 Views
Subjects: refinancing,

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