Refinancing replaces an existing mortgage with a new one. The potential benefit should be weighed against closing costs, the new term, and how long you expect to keep the loan.
Define the goal
Common goals include reducing a payment, shortening a term, changing loan type, removing mortgage insurance, or accessing equity.
Find the break-even point
Compare upfront costs with expected monthly savings. The time required to recover those costs is one useful way to evaluate the decision.
Look at total interest
Restarting a longer term can lower the payment while increasing interest paid over time. Compare both the near-term payment and long-term cost.
Mortgage programs, rates, costs, and eligibility change. This article is educational and is not a loan offer or financial advice. A licensed loan officer can review your specific scenario.