To reduce the total cost of a mortgage, the best strategy among the options provided is:
A) Refinancing to a shorter term
Refinancing to a shorter loan term (such as moving from a 30-year to a 15-year mortgage) typically results in a lower interest rate and significantly reduces the amount of interest paid over the life of the loan, leading to overall cost savings.
The other options generally would not help in reducing the total cost:
- B) Extending the loan term usually increases the total interest paid over the life of the loan.
- C) Making minimum payments only may keep you in debt longer and increase the total interest cost.
- D) Delaying down payments might lead to higher loan amounts and subsequent interest costs.
Therefore, the correct answer is A.
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