Refinancing.
There are four reasons to refinance and only four. Knowing which one is yours makes the decision simple.
Two of the four turn on what your house is worth today. If you do not know that number, start with an automated estimate.
The four reasons
Lower your rate
The obvious one. The question is not whether the new rate is lower, it is how long it takes the savings to cover the cost of doing it. That is the break-even point, and if you plan to move before you reach it, refinancing loses you money.
Change your term
Shortening the term builds equity faster and costs less in total interest, at a higher monthly payment. Lengthening it does the reverse. Both are legitimate depending on what you need from your budget right now.
Remove mortgage insurance
This is the one people miss. Most FHA loans carry mortgage insurance for the life of the loan. Once you have built enough equity, refinancing into a conventional loan can remove it entirely — and that saving alone sometimes justifies the move even when the rate barely changes.
Take cash out
Replacing your mortgage with a larger one and taking the difference. Covered properly on the equity page.
Run your own numbers first. The refinance calculator shows the break-even point, which is the number that actually decides it.
Find out what you qualify for.
A licensed loan officer reviews what you send and tells you where you stand, in writing. No cost, and no obligation to go further.