Refinancing Your Mortgage

When refinancing makes sense

Common reasons to refinance:

• Rates have dropped meaningfully below your current rate
• Your credit score has improved since you bought
• You want to switch from an adjustable to a fixed rate
• You'd like to drop PMI after reaching 20% equity

Types of refinance

Rate-and-term refinances change your rate or loan length. Cash-out refinances let you borrow against equity. Streamline refinances (FHA, VA) reduce paperwork for existing government loans.

Find your break-even point

Divide total closing costs by your monthly savings. If you'll stay in the home longer than that many months, refinancing likely pays off.

Prepare your paperwork

Gather recent pay stubs, W-2s or tax returns, bank statements, your current mortgage statement and homeowners insurance details.