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When Should You Refinance?

When 32-year-old James W. Johnson of Raleigh, North Carolina, bought his first home five years ago, the best deal he could find was an adjustable rate mortgage with a 5.625% interest rate. Last April, aware that his ARM was about to reset, Johnson refinanced to a fixed-rate mortgage with a 5.275% interest rate. “I was blessed enough that interest rates have gotten lower in the last five years,” he says.

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