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Refinance

Refinancing 101.

A refinance replaces your current mortgage with a new one. Done for the right reason, it saves money. Done for the wrong one, it costs you. Here’s how to tell the difference.

What refinancing actually does

You take out a new loan that pays off the old one. The new loan can have a lower rate, a different term, or let you tap equity — depending on your goal. You’ll go through underwriting and pay closing costs again, which is exactly why the math matters.

The main reasons people refinance

  • Lower the rate or payment. If rates have dropped or your credit has improved, a rate-and-term refinance can reduce your monthly payment.
  • Shorten the term. Moving from a 30-year to a 15-year can save a lot of interest over time — often with a higher monthly payment.
  • Drop mortgage insurance. If your home has gained enough equity, refinancing may let you remove monthly mortgage insurance.
  • Tap equity. A cash-out refinance converts equity into cash for renovations, debt payoff, or other goals.

The number that decides it: break-even

A refinance has upfront costs. To know if it’s worth it, find your break-even point — how long it takes for the monthly savings to cover those costs.

A simple version: divide your total closing costs by your monthly savings. If a refi costs $4,500 and saves you $250 a month, you break even in about 18 months. Stay in the home past that and you’re ahead; sell or refinance again before it, and you may not recoup the cost.

Run your own numbers on the refinance break-even calculator before you commit.

Traps to avoid

  • Restarting the clock. Refinancing a 30-year loan into a new 30-year lowers the payment but can add years of interest. Compare total cost, not just the monthly number.
  • Chasing a tiny rate drop. If the savings are small and closing costs are real, the break-even may be too far out to matter.
  • Rolling costs in and ignoring them. Financing closing costs into the loan hides them — but you still pay, with interest.
How soon after buying can I refinance?
It varies by loan type and lender — sometimes a few months, sometimes longer. Your officer can tell you what applies to your loan.
Does refinancing hurt my credit?
A full refinance application involves a hard credit pull, which can dip your score temporarily. Rate-shopping within a short window is generally treated as one inquiry.
Is a lower monthly payment always good?
Not necessarily. A lower payment from a longer term can mean more total interest. Look at both the monthly payment and the lifetime cost.

Rule of thumb: if you’ll stay in the home well past your break-even point and the total-cost math works, a refinance can be a smart move. We’ll tell you honestly if it isn’t.

General education, not financial advice or a commitment to lend. Your results depend on your rate, costs, equity, and how long you keep the loan.

Ready when you are

Should you refinance? Let’s find out.

Answer a few quick questions — no impact to your credit to check — and we’ll run the real numbers with you.

Get my rate Call 844-562-6284