Thinking About Refinancing?

Choose the goal before the loan

A refinance replaces your current mortgage with a new one. You might want to reduce the payment, change the repayment timeline, move from an adjustable rate to a fixed rate or access equity. Name the goal first so a lower advertised rate does not become the entire decision.

Ask how long you expect to keep the home and this mortgage. Moving or refinancing again can change whether the upfront expense makes sense for your plans.

Before replacing your loan, ask whether you can reduce its cost through PMI cancellation or lower its required payment through an eligible mortgage recast. These options have different requirements and should be compared with the complete cost of refinancing.

Put the current and proposed loans side by side

• Balance: Compare the payoff amount with the new loan amount. Identify cash taken out or costs added to the balance.
• Rate and structure: Review the interest rate, fixed or adjustable terms and any future payment changes.
• Time: Compare the current loan's remaining months with the full proposed term.
• Payment: Separate principal and interest from mortgage insurance, taxes and homeowners insurance.
• Costs: Review closing charges, points, credits and any prepayment penalty on the current loan.

A lower payment caused by stretching repayment over more years can increase total interest. A shorter term may cost more each month while paying off the debt sooner. Compare the remaining balance as well as payments over the period you expect to keep the loan.

Confirm which taxes and insurance remain in the payment. The mortgage escrow guide explains how those contributions can change separately from principal and interest.

A simple payback check

The shortcut leaves out differences in principal repaid, remaining balances, investment returns and tax effects. It does not model a changing payment or an early payoff. Include every incremental charge in a fuller comparison and distinguish costs from escrow deposits or bills you would pay anyway.

Check how the new loan changes the plan

Financing closing costs reduces cash needed now but increases the amount borrowed. A lender credit may exchange a higher rate for lower upfront costs. Neither makes the expense disappear. Read the closing-cost guide to separate these choices.

If you want cash out, compare the added debt with its purpose and repayment period. Home equity borrowing is a different option to discuss when you want to keep an existing mortgage. Availability depends on your circumstances and property.

Use the payment and amortization tools to explore assumptions; they are not a complete refinance comparison. Then explore refinance options and ask Douglas to review the current loan alongside the proposed terms.

Move from a comparison to a refinance application

First decide whether you want a rate-and-term change, cash out or a reduction in principal using your own funds. Ask which program's seasoning and eligibility rules apply. There is no single waiting period that covers every refinance.

1. Gather the current loan terms and explain income, property use and any other liens.
2. Compare written estimates using consistent loan amounts, terms and lock assumptions.
3. Confirm the application requirements and provide documents through the secure application channel.
4. Review the lender's credit, income, title and property conditions. Ask whether an appraisal is required.
5. Check the rate-lock expiration and any extension costs against the actual closing schedule.
6. Compare the final disclosure with the latest estimate and verify payoff, funding and first-payment instructions.

Keep paying the existing mortgage according to its terms until the payoff is confirmed; a pending refinance is not permission to skip a payment. Extra principal on the existing loan also does not automatically lower its required monthly payment. An eligible recast or a separate servicer arrangement has its own conditions.

If the immediate problem is difficulty making payments, contact your servicer and a HUD-approved housing counselor about available help. A modification changes an existing loan while refinancing replaces it with a newly approved loan. The CFPB explains hardship options. For a planned refinance, use the detailed cost and savings comparison to review what the new payment leaves out.