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Short answer
A refinance can lower a payment, reduce interest cost, shorten a term, or change payment risk. It also replaces the existing loan and adds transaction costs, so the useful question is whether the new loan improves your goal after those costs.
Compare these
- New payment and cash needed at closing.
- Estimated closing costs divided by monthly savings as a rough break-even check.
- Interest and remaining balance at the point you expect to sell, refinance, or pay off the loan.
Watch for
- Restarting with a longer term that lowers the payment but raises long-run cost.
- A so-called no-cost refinance that uses a higher rate or adds costs to the balance.
- Cash-out proceeds that increase the mortgage balance and reduce equity.
A useful next step
Put the current loan and the proposed loan side by side over the same time horizon before deciding.
Check the source
This guide provides general educational information. It is not a personalized loan recommendation, approval, rate quote, or commitment to lend.
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