When Is the Right Time to Refinance Your Home?

If you already own a home, you’ve probably heard people talk about refinancing. But what does that really mean and how do you know if now is the right time? Refinancing can save you money, shorten your loan term, or even put cash in your pocket. The trick is knowing when it actually makes sense.

Let’s break it down.

What Does “Refinancing” Mean?

Refinancing is basically replacing your current mortgage with a new one (ideally with better terms). Think of it as giving your home loan a makeover.

Signs It Might Be Time to Refinance

• Interest rates have dropped
  If current rates are at least 1% lower than your existing mortgage, refinancing could reduce your monthly payment and save you thousands over the life of your loan.

• You want to lower your monthly payment
  Extending your loan term (for example, from 20 to 30 years) spreads payments out, which can make monthly bills more affordable.

• You want to pay off your loan faster
  Switching from a 30-year loan to a 15-year loan can save you a ton in interest — and help you own your home sooner.

• You have equity you’d like to use
  A cash-out refinance lets you borrow against your home’s equity for things like renovations, paying off debt, or covering big expenses.

• Your credit score has improved
  Better credit often means better loan terms. If your score has gone up since you first bought your home, refinancing could get you a lower rate.

When Refinancing Might Not Be the Best Move

If you plan to sell your home soon (you may not recoup closing costs).

1. If refinancing will extend your loan so long that you’ll end up paying more in interest overall.

2. If you don’t qualify for significantly better terms than you have now.

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So, Is Now the Right Time?

The truth is, the “right time” depends on your unique situation: your interest rate, monthly goals, and future plans. That’s why talking to the right lender matters. We take a close look at your current loan, the market, and your goals to help you decide if refinancing will actually benefit you. We’ve already helped over 561 families achieve their homeownership dreams… and now that you’re here, we can help you too.