Q: Why would I refinance my mortgage?
A: Homeowners refinance to lower monthly payments, shorten their loan term, or tap into equity for goals like remodels, education, or investments. The right refinance strategy can improve cash flow and long-term financial stability.
Before You Refinance Your Mortgage…
Refinancing can be a great financial move if it reduces your monthly payments, shortens your loan term, or helps you build equity faster. However, refinancing does come with costs and may not make sense for every situation.
Ask yourself these questions before moving forward:
- How long do I plan to live in the home?
- How much money will I actually save each month?
Refinancing generally costs between 2%–5% of the loan amount. Depending on your savings, it may take 1–3 years to break even. If you plan to move sooner, the costs may outweigh the benefits.
Always look for ways to reduce debt, increase savings, and build equity. Taking cash out without a clear plan may work against those goals.