When you refinance your mortgage, you change the terms of the loan which could be the interest rate, type of interest rate, time to repay, or a combination of those.
The most obvious reason to refinance your mortgage is to get a lower rate. Depending on the term, a lower rate could reduce your monthly payment and result in less interest paid over the course of the loan.
What could you do with an extra couple hundred bucks in your pocket every month?
Another common reason is to get out of an ARM or Adjustable Rate Mortgage. Moving to a fixed mortgage rate will enable consistent monthly payments.
Other reasons to refinance include:
Check out our mortgage refinance calculator below to see how much you could save by refinancing your mortgage and lowering your rate.
Step 1. Get prequalified rates in 3 minutes – Provide information about you and your home and see offers from multiple lenders without impacting your credit.
Step 2. Compare rates – View the interest rate and cost breakdown from each lender to see what works best for you.
Step 3. Upload your documents – You only have to upload your documents once directly to Credible and they walk you through the entire process from start to finish.
While there’s no fee to check refinance rates available to you, be prepared to pay some fees to finalize the deal.
Closing costs and other fees with refinancing may be around 2% to 6% of the mortgage. Be sure to factor in these additional costs when you are calculating your potential savings. Some lenders offer no closing costs options but these typically come with a higher interest rate and there still may be some fees. Typical fees to expect include:
