When should I refinance?
A common rule of thumb is that refinancing makes sense when current rates are about 2% lower than the rate on your existing loan, but that's only a starting point. A smaller rate drop can still pay off if you'll keep the loan for years, and a cash-out refinance or a move to a shorter term can be worth it even without a rate cut. The real question is how long it takes your monthly savings to repay your closing costs.
Should I refinance if I plan to move soon?
Probably not. If you'll sell before you reach the break-even point, you won't recover the closing costs. Our refinance calculator shows the break-even month for any scenario.
How much does it cost to refinance?
Typically 2% to 3% of the loan amount, covering the appraisal, title work, recording fees, and lender charges. Some lenders offer no-closing-cost options in exchange for a slightly higher rate, which can be smart if you won't keep the loan long.
What are points, and should I pay them?
A point equals 1% of the loan amount, paid at closing to reduce your interest rate (usually by about an eighth to a quarter of a percent per point). Paying points makes sense when you'll keep the loan long enough for the monthly savings to exceed the up-front cost. Our points calculator does that math for you.
What does it mean to lock my rate?
A rate lock guarantees your interest rate for a set period, usually 30 to 60 days, so it can't rise while your loan is being processed. If rates are volatile, locking early removes the risk. If you think rates may fall, you can float, but you're taking on that risk yourself.
I've had credit problems. Can I still refinance?
Often, yes. A couple of late credit card payments, especially fewer than three in a year and none more than 30 days late, usually won't keep you from a competitive rate. More serious issues may mean a higher rate or a different program, but they rarely mean no. We'll look at your specific situation and tell you honestly.
Should I just pick the lowest rate?
Compare the whole picture: rate, closing costs, points, and the lender's service and reliability. The lowest advertised rate sometimes comes with the highest fees. That's exactly why we shop multiple lenders and show you the total cost of each option side by side.