We've got a six-year old mortgage. Should we refinance?

Q: We have 30-year FRM at 6.25% from 2004. The remaining balance is $123,000, while the value of our home is $220,000. We have excellent credit. Should we refinance?

A: Yes! You are a good candidate for refinancing. However, you should probably look at loan terms shorter than a 30-year term, which will see you re-start the "amortization clock" all over again. To lock in savings, consider a 20-year or even 15-year mortgage term instead; your monthly payment will only decline slightly (or perhaps not at all) but you will carve anywhere from four to nine years off your mortgage, saving a bundle of interest in the long haul. Of course, if improving your cash-flow is more important, a new 30-year term would work for you.

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