http://livingoffdividends.com/2008/02/10/interest-only-loans-and-annual-refinances/ Join me on my journey to achieve financial independence through dividends, passive income and investments Tue, 16 Mar 2010 21:22:11 -0700 http://wordpress.org/?v=2.8.1 hourly 1 http://livingoffdividends.com/2008/02/10/interest-only-loans-and-annual-refinances/comment-page-1/#comment-3252 Lee Fri, 15 Feb 2008 13:32:49 +0000 http://www.livingoffdividends.com/2008/02/10/interest-only-loans-and-annual-refinances/#comment-3252 How about doing a refi for the same total value and term as the orignal loan. This puts cash in you pocket. Then, make an immediate principle repayment for the excess cash generated by the refi (which should equal the principal payoff to date on the original loan). Then net result of this approach is to put you at the same point on the amortization/principle payout schedules as you were on the original loan with the same time left to finish the loan and a smaller monthly payment. Even better, continue to make the same monthly dollar payment as before and shorten the term of the loan. This method keeps you from returning to the high interest/low principle payments that occur in the early years of a loan. How about doing a refi for the same total value and term as the orignal loan. This puts cash in you pocket. Then, make an immediate principle repayment for the excess cash generated by the refi (which should equal the principal payoff to date on the original loan). Then net result of this approach is to put you at the same point on the amortization/principle payout schedules as you were on the original loan with the same time left to finish the loan and a smaller monthly payment. Even better, continue to make the same monthly dollar payment as before and shorten the term of the loan. This method keeps you from returning to the high interest/low principle payments that occur in the early years of a loan.

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