Refinance Once, Then do it again Rates have fallen so steadily that refinancing may make sense even if you have done so once already. Bob and Michelle Barbo of Waltham, MA. refinanced twice within three months
last year. In October, they trimmed the rate on their 30-year fixed mortgage by a full point -- from 9.13% to 8.13% -- for a monthly savings of $63. Plus, because home prices in their area had boosted their home equity, they were
able to stop paying private mortgage insurance that cost them $120 a month. To exploit the continued decline in rates, the Barbos refinanced again in December. Their new 30-year fixed mortgage is at 7.375%, lopping another $55
off their monthly bill. Since the couple had chosen a no-cost refinancing each time, their total out-of-pocket expenses came to just $400 in appraisal fees. So by the time you read this, they will already have recouped their up
front costs. "Now we can use the savings to build up a cash emergency fund," says Bob. If you are considering a second refinancing, don't overlook this potential tax write-off: When you pay points to refinance, you
must deduct the amount over the life of the loan, usually 30 years. But when you refinance a second time, all of the points that have not yet been deducted from the first refinancing can be written off in a lump sum. Say you
refinanced to a 30-year mortgage in 1993 and paid $3,000 in points. By now, you would have written off roughly $500. If you refinance again this year, you could deduct the remaining $2,500 on your 1998 tax return. For a homeowner
in the 28% tax bracket, that works out to a savings of $700 – enough to offset some or all of your costs this time around. If you are looking to refinance and having an immediate payoff you should look into getting a Shoreline Mortgage Corporation | | Home | C o p y r i g h t © 1 9 9 8 , 1 9 9 9 Shoreline Mortgage Corporation
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