Get answers to the most common questions about refinancing your mortgage here.

Many homeowners have questions about refinancing their mortgage. When should you refinance? How much will refinancing cost? Can I refinance if I have bad credit? Keep reading for the answers to these questions and more.

What is mortgage refinancing and why do it?

When you refinance a mortgage, you replace your existing loan with a new one.

The primary reason most people refinance is for a lower interest rate. However, homeowners also refinance to shorten their loan term; to switch from an ARM to a fixed rate; and to take out cash.

What are the benefits of refinancing?

In addition to a lower monthly payment, when you refinance at a lower rate, you’ll also pay less interest over the life of the loan. In some cases, this can be tens of thousands of dollars.

How much does it cost to refinance my home?

Like your current mortgage, a refinanced loan will have costs. This includes an appraisal, a title search, and application and closing fees. Depending on your lender, costs can be 2% to 5% of the principal amount.

When should I refinance my mortgage?

If interest rates are lower than what you’re paying for your current mortgage, it might be a good time to refinance. Often, if current rates are one percentage point less than what you’re currently paying, it’s worthwhile.

When deciding if you should refinance, consider how long you intend to stay in your home. If you plan to move in the short-term, you might not break even with a refinance.

The best way to determine if you should refinance is to do math:

• Use our Mortgage Calculator and current rates to see what your new payment would be if you refinance.
• To determine how long it will take to break even on a new loan, run your numbers through our Mortgage Refinance Break Even Calculator.

Can I take cash out when I refinance?

Yes, you can tap into your equity when refinancing and take cash out. Homeowners who opt to do this can use the cash any way they want. Common reasons for taking out cash are to buy a new car, pay tuition, consolidate debt, travel and make home improvements.

Depending on how much cash you take out, your monthly payment may not go down. 

If I have bad credit, can I refinance?

It depends. Your current lender may work with you to refinance so they can keep your business. Other lenders may be reluctant to make the loan. Also, you won’t have access to the most competitive refinancing offers.

If you have bad credit, talk to your lender and see if they’ll work with you. Here at Consumers, we do everything we can to help members get the best refinancing deal possible, even if they have a less-than-perfect credit score. 

I’m retired; can I refinance my mortgage?

Yes, retirees can refinance their home loans. For some people, refinancing their mortgage can cut down on their monthly expenses.

When you apply to refinance in retirement, you’ll have to show stable income for repaying the loan.

If you’re ready to refinance

If the calculators show it’s a good time for you to refinance your home mortgage, we’re here to help get a new loan. Contact one of our mortgage loan officers to get started.

Consumers helps more than 2,000 members finance land, first and second homes, and home improvement projects each year. We’d love to help you with a mortgage or home equity line of credit; contact us online or call us at 800-991-2221.