Still paying the same mortgage rate from five years ago? Refinancing might help you save—if the timing is right.
Interest rates, personal finances, and home values are always evolving. For many homeowners, refinancing presents an opportunity to lower monthly payments, reduce overall interest costs, or tap into equity for other financial goals. But refinancing isn’t always the right move—and understanding the timing is key.
This guide will help you determine when a refinance makes financial sense and what factors to consider before proceeding.
1. Refinance to Lower Your Interest Rate
If current rates are significantly lower than what you locked in previously, refinancing could lower your monthly payment and reduce the total interest you pay over the life of your loan.
2. Refinance to Change Your Loan Term
- Switching from a 30-year to a 15-year term may help you pay off your home faster and save on interest (with higher monthly payments).
- Extending to a longer term can reduce your monthly payment if you’re looking to increase monthly cash flow.
3. Cash-Out Refinance for Equity Access
Need to fund a renovation, pay off high-interest debt, or cover a large expense? A cash-out refinance lets you borrow against the equity you’ve built—typically at a lower rate than personal loans or credit cards.
4. Remove Private Mortgage Insurance (PMI)
If you originally purchased your home with a low down payment, refinancing once you reach 20% equity can eliminate costly PMI and reduce your monthly expenses.
5. Refinance to Switch Loan Types
Refinancing from an adjustable-rate mortgage (ARM) to a fixed-rate loan (or vice versa) may be a strategic move based on your financial outlook and interest rate trends.
Pro Tip: Refinancing typically comes with closing costs. To decide if it’s worth it, calculate your break-even point—how many months of savings it will take to cover those costs. If you plan to stay in the home beyond that, refinancing could be a smart move.
Not sure if refinancing is right for you? We’ll review your current mortgage, crunch the numbers, and give you a clear, no-pressure recommendation.
Contact our Sales team to explore your refinance options—or refer a friend and help them save too.
📞 855-LOANWORKS (855.562.6769)
✉️ Sales@LoanWorks.ai
Disclosures: LoanWorks, Inc. is a mortgage broker licensed in multiple states. All information provided on this blog is for general informational purposes only and does not constitute an offer to lend or a commitment to approve any loan. Loan terms, rates, and eligibility are subject to change without notice and may vary based on creditworthiness, property type, and other factors. Not all applicants will qualify.LoanWorks, Inc. does not guarantee approval, rate, or term and does not make any express or implied claims about the availability of specific programs or products.
By refinancing an existing loan, total finance charges may be higher over the life of the loan. Always consult with a licensed LoanWorks representative for details specific to your financial situation.
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