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REFINANCING
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Information About Refinancing
What if interest rates drop significantly after you obtain a mortgage? Many people refinance to take advantage of lower rates to reduce their payments or obtain a shorter term loan. Are you ready to refinance? The answer usually depends on your reasons for doing so. There are generally three main reasons why you would want to refinance:


1. Reduce your interest rate and lower your payments.
Lower interest rates mean lower payments. But you have to weigh the up front costs of refinancing against the potential savings in your monthly payment. A common rule of thumb is to try to recover the cost of refinancing within two years. 
2. Reduce your mortgage term to pay off your loan faster.
When current market interest rates are lower than your existing mortgage rate, refinancing to a shorter term mortgage can save you thousands of dollars in interest charges over the life of the loan. 
3. Liquidate your equity to take "cash out" of the property.
Borrowing against the equity in your home can be a low cost (and usually tax deductible) way to get needed cash. Mortgage interest rates are often less than other types of consumer loans, and the potential tax deductibility of the interest can reduce the "after tax" cost even further.  Please consult a tax advisor about the deductibility of interest.

Our "Refinance Analysis Calculator" can help you determine when is the best time to refinance. 
For current interest rates call us at 906-341-4600.

 


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