When Is the Right Time to Refinance Your Mortgage

Is your monthly house payment taking up too much of your budget? It might be time to refinance your mortgage.

Refinancing means getting a new home loan to replace your old mortgage. Many homeowners refinance when interest rates drop so they can lower their monthly payment and save money over the life of the loan.

This guide will help you know when it’s the right time to refinance your mortgage and how to get started.

Why Refinancing is Beneficial

Homeowners refinance for many reasons, including:

• Lowering monthly payments
• Getting a better interest rate
• Paying off the loan faster
• Switching from an adjustable rate to a fixed rate

Signs It Might Be Time to Refinance

You may want to think about refinancing if:

• Interest rates have dropped
• Your credit score has gone up
• You plan to stay in your home for several years
• You want to change your loan term (shorter or longer)
• You need cash for a big expense, like home repairs or college

Your Easy Refinance Checklist

Step 1: Know Your Current Loan Details

Find your loan balance, interest rate, and monthly payment.

Step 2: Check Your Credit Score

Verify that your credit score is in good shape.

Step 3: Calculate Your Savings

Use our online mortgage refinance calculator to see how much you could save. Keep in mind that refinancing has fees, often called closing costs or refinance fees.

Common refinancing closing costs include:

• Origination fee – The lender’s fee for processing the new loan.
• Appraisal fee – The fee to the company that confirms your home’s value.
• Title search and title insurance – To verify ownership.
• Title company fee – Closing fees at their establishment.
• Credit report fee – The small fee for a hard credit pull.
• Recording fees – Clerical fees to update public records.
• Attorney or notary fees – Occasional fees required in some states.

Step 4: Gather Your Documents

Provide proof of income, tax returns, and your current mortgage statement.

Step 5: Apply for Refinancing

Complete your refinance application and lock in your rate.

Step 6: Close on Your New Loan

Sign your closing papers, and your new mortgage will begin!

When You Should Not Refinance

It might not be the right time to refinance if:

• Your closing costs are too high
• You plan to move soon
• Your credit score has dropped
• You already have a very low interest rate

Tips for Smart Refinancing

• Wait for a rate that saves you enough money to justify the fees.
• Ask your lender about refinance fees and total costs.
• Make sure you’ll save money in the long run.

Final Thoughts

Refinancing can be a great way to save money and lower your monthly payment—but timing matters. Before you decide, compare rates, review your finances, and look at the total savings after closing costs.

If you’re ready to explore your options, contact an Honor Mortgage expert today. They’ll help you decide if now is the right time to refinance your home loan.