A California Refinance may be to your advantage if the current interest rate on your mortgage is at least 2 percentage points higher than the prevailing market rate. This figure is generally accepted as the safe margin when balancing the costs of a California refinance against the savings.

Refinancing can be a good idea if you:

* Want to get out of a high interest rate loan to take advantage of lower rates. This is a good idea only if you intend to stay in the house long enough to make the additional fees worthwhile. Most sources say that it takes at least three years to realize the savings from a lower interest rate, given the costs of the refinancing.
* Have an adjustable-rate mortgage (ARM) and want a fixed-rate loan to have the certainty of knowing exactly what the mortgage payment will be for the life of the loan.
* Want to convert to an ARM with a lower interest rate or more protective features (such as a better rate and payment caps) than the ARM you currently have.
* Want to build up equity more quickly by converting to a loan with a shorter term.
* Want to draw on the equity built up in your house to get cash for a major purchase, home remodeling, or for your children’s education.

Financial contracts can be very confusing. Before signing yourself to a major long term California refinance contract have an attorney, familiar with financing and taxes, examine and explain the details (where the Devil is). A good tax finance attorney can save you many times his fee over the years, not to mention possible legal problems.

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