When should I refinance my mortgage? ​ 

When to refinance a mortgage depends on a borrower’s current mortgage and what they are hoping to get from it. A mortgage refinance should change an owner’s home loan in a way that benefits the borrower. 

Those looking to secure a lower mortgage rate may have to wait until rates drop. If you are hoping to refinance your mortgage and tap into your home equity, you may want to wait until your home value or equity increases.  

To talk with a Loan Officer and find out if it is the right time for you to refinance your mortgage, start your application today! 

How refinancing works and what it means for homeowners 

Refinancing your mortgage replaces your current mortgage with a new mortgage that has new terms. It does this by essentially using a new mortgage to pay off your current mortgage. 

Homeowners refinance their mortgages to benefit them and their financial situation. There are many types of mortgage refinance that can help a homeowner. Depending on the refinance you choose, mortgage refinances could potentially lower your monthly payments, lengthen your loan term or access home equity.  

When is the right time to refinance your mortgage? 

The right time to refinance your mortgage depends on you and what you are hoping to get from your refinance. These are a few times when borrowers feel it has been the right time for them to refinance. 

Interest rates have dropped significantly 

Every month, borrowers pay a percentage of their home loan in interest. This interest is worked into your monthly mortgage payments. If mortgage interest rates have dropped significantly since originally getting your home loan, refinancing to get this lower rate could save you a little extra money every month. 

Your credit score has improved 

Some borrowers’ credit scores improve after they originally get their mortgage. Refinancing when your credit score has increased could get you a lower rate on your mortgage. Lower mortgage rates tend to mean putting less toward your mortgage payments every month.  

Your home value has increased 

If your home value has increased since getting your original mortgage, a refinance will take that into consideration and boost home equity. A refinance to prove higher home equity can remove any private mortgage insurance or mortgage premium insurance you may have. 

Your home value can increase through property prices in your area rising or home improvements that you make. 

You want to lower your monthly mortgage payment 

The goal of borrowers when refinancing their mortgage is to lower their monthly payments. There are many ways in which borrowers could refinance their mortgage in order to reduce their monthly payments. Besides increased credit scores or interest rates falling, some borrowers choose to extend their loan length. 

A longer loan length typically means lower monthly payments spread out over a greater period of time. 

You want to switch from an adjustable-rate to a fixed-rate loan 

If you are looking to make your mortgage payments more predictable, it may be time to consider a loan refinance to switch from an adjustable-rate to a fixed-rate mortgage. 

An adjustable-rate mortgage can make payments hard to predict as interest will change with fluctuations in mortgage rates. Those looking for a little more stability in their payments could consider refinancing their home loan to switch from an adjustable-rate to fixed-rate mortgage. 

Refinancing your mortgage: How to get started 

If you are looking to refinance your mortgage, you can get started by completing an online application.  

Online refinance applications will connect you with a professional Loan Officer who can walk you through the refinance application and process. Loan Officers can also tell you what your new mortgage could look like.  

Get started on your mortgage refinance by beginning your online application today! 

Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Refinancing your mortgage may increase costs over the term of your loan. Restrictions may apply.  

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