Compare three things together
Monthly change: what changes in the payment, and does repayment start over a longer term?
Upfront cost: which charges are paid at closing and which are added to the balance?
Time horizon: how long do you expect to keep the loan? A simple break-even calculation is only a starting point when loan structures differ.
What would you like to change?
Maybe you want a smaller payment, a shorter term, a fixed rate or money for a project. Start with that reason, then look at the mortgage you have. A refinance is useful only if the change makes sense for your situation.
A lower payment can come from stretching repayment over more years. That may help the monthly budget while increasing the time you pay interest. Look at both the payment now and the longer-term cost.
What would the new loan cost?
Check which fees you pay at closing and which are added to the balance or reflected in the terms. Financing a fee doesn’t remove it. Make sure the Loan Estimate matches the loan amount and term you discussed.
For a simple comparison with the same balance and term, dividing upfront costs by monthly savings gives a rough break-even period. When the balance, term or other costs change, that shortcut isn’t enough. Ask for a comparison that includes those differences.
Taking cash out means borrowing against the home
A cash-out refinance replaces the mortgage with a larger loan. Some equity becomes cash you receive, but the new balance still has to be repaid. Consider what you’ll use the money for and what the new loan will cost.
If you’re thinking about paying off other debts, compare more than the payment. Moving unsecured debt into a mortgage secures it against your home and changes the consequences of missed payments. Discuss other options as well.
Have your current mortgage statement handy
Your balance, rate and remaining term give us somewhere to start. Call us to compare the mortgage you have with a proposed loan. Refinancing doesn’t guarantee savings or approval.
Educational information, not an offer to lend. Program rules, costs and availability can change. Ask a loan officer about current terms for your situation.
