Refinancing is the process of paying off your existing mortgage by taking a new mortgage and using the same property as collateral. Homeowners may refinance for many reasons, such as to reduce their mortgage payment if interest rates have dropped, to switch from an adjustable rate to a fixed rate mortgage if rates are rising, or to draw on the equity that has built up.

Closing costs for a refinance are generally comparable to those for any mortgage. If you’re refinancing to reduce your payments, we will want to discuss your breakeven point to see how long it will take before you recover the closing costs and begin to save money.

If you’re planning to move within a few years, refinancing may not make sense and actually save you enough to justify the closing costs. And if you refinance to use some of your home equity, you run the added risk that prices could drop and you could end up owing more on your mortgage than you could realize from selling your home.  Let’s run a total cost analysis to see if refinancing makes sense!