Being smart with $$ -- Refis can make you poorer

The problem with refis... When you refi a 300k mortgage 10 years into it, going from 4% to 3%, you may lower your monthly payments from $1430 to $990. BUT---> only $200 of that is saved interest. $240 is from paying less principal because you extended your maturity by 10 years. When you go spend that $440 you saved, your net worth is now LOWER than if you didn't refi.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com