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The biggest benefit of this process is that you will be able to lower your monthly mortgage payment. Since you are reducing the amount of money that you owe to the lender and keeping the same loan term, they are going to lower the amount of money that you pay them each month.
Another benefit of this process is that you will have to pay less interest over the remainder of the loan. Since the loan balance is lower, this is going to lower the amount of interest that is accruing as well.
One of the disadvantages of this program is that you will have to make a sizable payment in order to qualify. Many times, you will have to come up with at least $10,000 at one time in order to have your lender re-amortize your loan. This means that you will have to make a large contribution out of your own pocket and cut into your savings.
Another disadvantage of this program is that you will potentially lose some of your mortgage interest deduction on your taxes.
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