Understand the Numbers Before You
Refinance Your Mortgage
Refinancing can save you thousands — but only when the numbers work in your favor. Here's what you need to know about rates, costs, and timing before you decide.
Rate Drop Rule
Most homeowners save money when rates drop at least 1% below their current rate. Smaller drops can still make sense if you're eliminating PMI or moving from an ARM.
Break-Even Point
Divide your total closing costs by your monthly savings. If you plan to stay past that break-even month, refinancing makes financial sense.
Closing Costs
Expect 2-5% of your loan amount in fees — appraisal, title, origination, and more. Many can be rolled into the new loan.
Credit Score
A 740+ FICO gets the best rates. Scores as low as 620 qualify for conventional, and 500+ may qualify for FHA.
Common Reasons to Refinance Your Mortgage
Lower Interest Rates
Reduce your monthly payment and save on total interest over the life of the loan.
Cash-Out for Major Expenses
Tap home equity for debt consolidation, home improvements, or emergency expenses at mortgage rates.
Shorten Your Loan Term
Move from a 30-year to a 15-year mortgage to pay off your home faster and save on interest.
Drop PMI or Switch Loan Type
Eliminate private mortgage insurance or move from an adjustable-rate to a predictable fixed-rate loan.
