Refinancing Your Mortgage

The process is similar to that of buying a home (minus the seller side of that equation). Because it involves creating a new mortgage, there are closing costs and origination fees associated with the transaction. Want to know if you can afford a rate and term refinance? Ask yourself whether you could recoup your closing costs in monthly savings in less than four years. If you will be in the house for longer than this period, then refinancing might be a smart move for you. You can run test scenarios through our mortgage refinance calculator to get a better sense of what your costs and savings might be.

In general, you should make at least three or four monthly payments on your initial mortgage before applying to refinance. It can also hinge on the type of loan you have, the included terms and conditions and your lender’s prescribed waiting period.

Yes. A hard inquiry will be required to pull your credit report and will impact your credit score. Also, because you’re taking on new debt, your credit score will be affected. Our advice: do not skip payments on your existing mortgage while you are refinancing. Make your payments on time, even when you think you will be closing soon. This protects your credit score.

The length of time it takes to go from application to closing on a refinancing loan will vary depending on seasonal and other factors, but generally it takes between four to six weeks to complete.

Interest rates are based on a variety of factors, including economic conditions as well as the Prime Interest Rate which is set by the Federal Reserve. They change constantly (both up and down), and that could be a big factor when choosing between a fixed rate or adjustable rate mortgage to refinance to.