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Refinancing ???

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Money Talk > Credit & Loans

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marymog
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Refinancing ???  Reply with quote  

I have a friend who is 49 years old and his financial advisor is telling him to refinance his house for 30 years (he currnetly is 3 years into a 15 year loan) and take out all the equity because that money can earn more interest than he would pay in loan interest. This didn't seem right to me so I need to know if anyone else agrees with his financial advisor and why? It seems to me that at his age that keeping the 15 year loan and having paid off by the time he is 62 makes more sense than having a loan that is paid off when he is 79. Any thoughts???? Question
Post Thu Aug 12, 2004 7:48 pm
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Andrew
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Some people agree with the investor's line of thinking, that if you can earn a higher rate of return on your money by investing than the rate you are borrowing it at then it is a good deal. If your friend enjoys investing and has the time to make sure that his investments are continuing to perform well then this could be a good way to go. Plus there are tax advantages to mortgage interest, as well as other factors. Personally, I'm not sure that I would take that advisor's advice, but it's not necessarily bad advice in and of it's own.
Post Sun Aug 15, 2004 2:06 pm
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