Refinancing Your Mortgage

Determine when refinancing makes financial sense based on your rate differential, break-even timeline, loan costs, and long-term plans.

23 action items~20 min to complete4 sections

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Should You Refinance?

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Calculate your potential monthly savings from the new rateKey

Estimate total closing costs (typically 2–5% of loan balance)

Calculate your break-even pointKey

Determine how many years remain on your current mortgageWatch out

Confirm you plan to stay in the home past the break-even point

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0.75%

Minimum rate reduction generally worth refinancing (rule of thumb)

$3,200

Average refinance closing costs in the U.S. (varies significantly by state)

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Understand rate-and-term refinance

Understand cash-out refinanceWatch out

Evaluate cash-out only if proceeds fund high-ROI uses

Consider a shorter loan term refinance

Compare term insurance quotes onlineAction

Avoid over-reliance on group coverageWatch out

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Check your current credit score — lenders will pull it again

Calculate current LTV (loan-to-value) ratioKey

Verify income stability and documentation is current

Check for prepayment penalty on current loanWatch out

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Get quotes from at least 3 lenders within a 14-day windowAction

Request a Loan Estimate from each lender and compare APR

Negotiate — closing costs, origination fees, and rate are all negotiableAction

Lock your rate once you've selected a lender and you're within 45 days of close

Review Closing Disclosure 3 business days before closingWatch out