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Before refinancing a mortgage, calculate savings on an after-tax basis. A lower mortgage rate reduces the dollar amount of your mortgage-interest deduction. And points charged by lenders, which are immediately deductible on initial home loans, must be deducted over the life of a refinancing.
When refinancing: Consider increasing total borrowing against your home... take out some cash to pay off higher-rate debts or credit cards.
Richard Roll, President, American Homeowners Association, 1100 Summer St., Stamford, Connecticut 06905. www.ahahome.com
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