Lower the monthly payment
A lower rate, longer term, removal of mortgage insurance, or different loan structure may reduce the payment. Compare the savings with closing costs and how long you expect to keep the loan.
Mortgage Strategy
Thinking about refinancing? Start with the goal.
Before talking rates, decide what the refinance needs to accomplish. Refinancing just to refinance is not the goal. Saving money or improving your financial situation is.
Use equity strategically
A cash-out refinance may help consolidate high-interest debt, fund improvements, or meet another financial goal. Moving unsecured debt into a mortgage can increase the repayment period and puts the home behind the debt, so the full strategy matters.
Pay the home off faster
A shorter term or a payment plan may reduce total interest and accelerate payoff. The new payment still needs to fit the budget comfortably.
Calculate the break-even point
Divide the applicable refinance costs by the monthly savings to estimate how long it may take to recover the cost. Also compare the new principal balance, loan term, total interest, and cash received.
Make the numbers earn the closing
A refinance should create a measurable benefit that supports your goal. I will compare the current loan with the new option and tell you when the math does not make sense.
Written by Marta Lillard
25+ years of mortgage experience, explained in plain English.
Mortgage Broker · First Coast Mortgage Funding · NMLS #879436 · Licensed in Florida and Georgia
Questions about your options?