Question 1

When does refinancing make sense?

Accepted Answer

A common rule of thumb is to refinance if the new rate is at least 0.75 percentage points below your current rate, and you plan to stay in the home long enough to recoup closing costs. The break-even calculation above tells you exactly when you start saving real money.

Question 2

What are closing costs on a refinance?

Accepted Answer

Closing costs typically run 2%-5% of the loan amount and include the appraisal, title insurance, lender origination fee, and recording charges. Some lenders offer a no-closing-cost refinance in exchange for a slightly higher rate.

Question 3

What is a cash-out refinance?

Accepted Answer

A cash-out refinance replaces your current mortgage with a larger one and pays you the difference in cash. It works only if you have meaningful equity. The new rate applies to the full loan, including the cashed-out amount.

Question 4

Does refinancing reset the clock on my loan?

Accepted Answer

It can. A 30-year refi is a fresh 30-year term unless you choose a shorter one. If you're ten years into a 30-year loan, refinancing to another 30-year loan adds back the years you've already paid down. A 20-year refi keeps you closer to the original payoff date.

Should you refinance your mortgage?

Refinance FAQ

Ready to find
your best rate?

Refinance FAQ

Ready to find your best rate?

Ready to find
your best rate?