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Making a Decision

At first glance, evaluating a refinance seems simple. Compare the fees you will pay with the amount your monthly payment will go down each month. Then you can calculate the payback period, the number of months before you come out ahead. For example:

Old monthly payment: $1,165.00

New monthly payment: $998.00

Savings: $167/month

Fees: $3,600

Payback = $3,600 / 167 = 22 months (approximately)


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