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Question for the Money Doctors

Question submitted on Mar 31, 2011.

Question

I lived in my condo since 1997, and have an interest only loan. I bought the condo at $99,500 and owe $90,000 on it. I don't feel like it is worth refinancing however I really like the location I live. In addition, refinancing costs too much. What should I do: move, or refinance and stay?

Answer

If you like the location you live I am unsure why you would suggest moving.  Interest rates are still low at this time so locking in with a fixed interest rate may make sense for your situation, not knowing the terms of your current mortgage.  Refinancing also will let you have a fixed payment, assuming your interest only loan is variable.  This would benefit you as many economists and investors think we could be at the beginning of a long term envrironment of rising interest rates.


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