A lower mortgage payment can be an expensive bargain if refinancing restarts the clock on a loan. Mortgage refinancing is not always beneficial, especially when closing costs, a longer repayment period or higher interest rates outweigh potential monthly savings. The remaining time in the home matters.
The article's subject highlights the importance of looking beyond an advertised rate or monthly payment. Taxes, insurance, transaction expenses and long-term ownership costs can materially change the result. If the homeowner moves before recovering closing costs, the refinance may never pay for itself.
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