Ever heard the old rule of thumb, you should only refinance if your new interest rate is at least two points lower? That may have been true years ago, but with refinancing dropping in cost over the last few years, it's never the wrong time to think about a new loan! Refinancing has a number of benefits that often make it worth the up-front expenditure many times over.

There are a variety of reasons homeowners refinance their mortgages. Most, however, fall into one of the following five categories:

  1. Reduce your monthly payment – lower rates or an ARM loan could give you extra money to save, spend or invest monthly*
  2. Cash in on your equity – get the money you need from a cash-out refinance for a home remodel, tuition, camp or even your summer vacation
  3. Rising mortgage payments – switching from an ARM to a fixed-rate can give you the sense of stability you’re looking for. 
  4. Consolidate debt – cash in on your equity and get those high-interest credit card balances under control once and for all.
  5. Close out your loan sooner – refinancing to a
shorter term or bi-weekly schedule could get you to owning your home outright sooner than you thought.

When you refinance, you might be able to lower your interest rate and monthly payment -- sometimes significantly. You might also be able to "cash out" some of the built-up equity in your home, which you can use to consolidate debt, improve your home, take a vacation -- whatever! With lower rates and balances, you might also be able to build up home equity faster with a shorter-term new mortgage.

Ultimately, for most people the amount of up-front costs to refinance are made up very quickly in monthly savings. We'll work with you to determine what program is best for you, considering your cash on hand, how likely you are to sell your home in the near future, and what effect refinancing might have on your taxes.