Refinance

When Should I Refinance?

Refinancing makes sense when the savings are greater than the costs over the time you plan to keep the loan. Common reasons include:

• Lowering your interest rate or monthly payment
• Switching from an adjustable rate to a fixed rate
• Shortening your term to pay off the home sooner
• Removing FHA mortgage insurance or PMI
• Taking cash out for home improvements, debt payoff or other goals

A helpful test is your break-even point: divide your closing costs by your monthly savings. If it takes 30 months to break even and you plan to stay 10 years, refinancing likely pays off. Try our refinance calculator.

Refinancing If I'm Moving Soon

If you plan to move before you reach your break-even point, refinancing usually doesn't make sense. A no-cost or low-cost refinance, where a slightly higher rate pays for your closing costs, may still work for short timelines.

How Much Refinancing Costs

Refinance closing costs are often 2% to 5% of the loan amount and include the appraisal, title insurance, lender fees and recording fees. You can pay them upfront, roll them into your new loan if you have enough equity, or take a lender credit in exchange for a slightly higher rate.

What Are Points?

Discount points are fees you pay upfront to lower your interest rate. One point equals 1% of the loan amount, so one point on a $300,000 loan is $3,000. How much each point lowers your rate varies with the market.

Should I Pay Points?

Paying points makes sense if you'll keep the loan long enough for the monthly savings to cover the upfront cost. Divide the cost of the points by the monthly savings to find your break-even. If you might move or refinance again soon, skipping points is usually smarter.

What Is a Rate Lock?

A rate lock is the lender's promise to hold a specific interest rate and points for a set time, often 30 to 60 days, while your loan is processed. If market rates rise during that time, your rate stays the same.

Should I Lock My Rate?

No one can predict rates. Locking gives you certainty, while floating is a bet that rates will drop. Most borrowers lock once they've found a rate and payment they're comfortable with. Make sure the lock period is long enough to close, since extensions can cost money.

Past Credit Problems

Past problems don't always rule out a refinance. Programs like FHA and VA streamline refinances may allow a simpler process with fewer credit hurdles for existing FHA or VA borrowers. Rebuilding with on-time payments over the past 12 to 24 months helps a lot.

A Few Late Payments

A late payment on a credit card several years ago usually won't stop you. Recent late mortgage payments are more serious. Most programs want to see no mortgage late payments of 30 days or more in the last 12 months (as of 2026, subject to change). If you've had a rough patch, let's review your history before you apply.

Is the Lowest Rate Always Best?

Not always. A very low rate can come with high points or fees. Compare the full cost using the APR and your Loan Estimate, and think about how long you'll keep the loan. The best loan is the one that fits your goals and your timeline, and that's exactly what I help you figure out.