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15 Year Refinance
With 15 or 16
years remaining on the mortgage, that's not a reason to rule
out refinancing at an interest rate much lower than your
current loan.
Whether you take out a new loan, or continue making payments
on the old loan, the outstanding loan balance is the same.
Let's say that the loan balance on your current loan is
$50,000. The interest component of your mortgage payment is
based on the monthly interest rate times the outstanding
loan balance.
With your existing mortgage, that rate is 9.75 percent. If
you refinance, you are financing the outstanding loan
balance at a 6-percent interest rate. The interest component
of the new mortgage payment will be less than the interest
component on the existing mortgage payment.
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