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REFINANCING GUIDE

Should You Refinance Your Mortgage? 6 Signs It May Be the Right Time

Refinancing can potentially help you lower your payment, adjust your loan term, change your mortgage type, or access home equity. The key is understanding when refinancing actually makes sense for you.

REFINANCE

Refinancing Is About More Than Getting a Lower Rate

Refinancing replaces your existing mortgage with a new loan. Depending on your goals and financial situation, the new mortgage may have a different interest rate, monthly payment, loan term, or loan structure.

While refinancing can offer valuable financial benefits, it also comes with costs and considerations. Before making a decision, it helps to understand what you want your new mortgage to accomplish.

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START WITH YOUR GOAL

What would you like your mortgage to do differently?

Lower your payment? Pay the loan off sooner? Access equity? Your refinancing strategy should start with the result you are trying to achieve.

IS IT TIME TO REFINANCE?

6 Signs It May Be Worth Exploring

Every homeowner's situation is different, but these are some of the most common reasons borrowers consider refinancing.

01 INTEREST RATE

You May Be Able to Lower Your Interest Rate

If mortgage rates are lower than when you originally purchased your home, refinancing may give you an opportunity to secure a lower interest rate.

Even a rate reduction that appears relatively small can make a meaningful difference over the life of a mortgage depending on your balance and how long you plan to keep the loan.

Consider the full picture: Compare potential interest savings with refinancing costs before deciding whether a new loan makes financial sense.
02 MONTHLY PAYMENT

You Want to Reduce Your Monthly Mortgage Payment

A lower interest rate, different loan term, or combination of both could potentially reduce your required monthly payment.

Lower monthly housing expenses may help create additional room in your household budget for savings, investments, debt payments, or other financial priorities.

03 LOAN TERM

You Want to Change Your Loan Term

Refinancing can give homeowners an opportunity to move from one loan term to another.

Shorter Term

May help you pay your mortgage off sooner and potentially reduce total interest paid over time.

Longer Term

May reduce the required monthly payment, depending on the new loan terms and interest rate.

04 LOAN TYPE

You Want to Switch Mortgage Types

Your current mortgage may have been a good fit when you originally purchased the property, but your needs may have changed since then.

Some homeowners refinance to move from an adjustable rate mortgage to a fixed rate mortgage, or to explore another loan program that better aligns with their current goals.

Example: Moving to a fixed rate mortgage may provide more predictable principal and interest payments.
05 HOME EQUITY

You Want to Access Some of Your Home Equity

If your home has increased in value or you have paid down a significant portion of your mortgage, you may have built equity that could potentially be accessed through a cash out refinance.

Depending on your circumstances, homeowners may use funds for renovations, major expenses, debt consolidation, investments, or other financial goals.

A cash out refinance increases the amount you are borrowing against your home, so the long term financial impact should be carefully evaluated.
06 FINANCIAL CHANGES

Your Financial Situation Has Changed

Your income, credit profile, debt, home value, or overall financial goals may look very different today than they did when you first obtained your mortgage.

If your financial position has improved, you may qualify for loan options that were not available to you previously.

BEFORE YOU REFINANCE

Look Beyond the New Monthly Payment

A refinance should support your larger financial goals. Consider both the immediate benefit and the long term cost before moving forward.

01
New Interest Rate

Compare your current rate with the proposed new rate.

02
Closing Costs

Understand the costs associated with obtaining the new loan.

03
Break Even Point

Consider how long it may take for potential monthly savings to offset refinancing costs.

04
Time in the Home

Think about how long you expect to keep the property and mortgage.

05
Loan Term

Make sure your new repayment timeline supports your financial goals.

06
Total Borrowing Cost

Consider the long term cost of the new mortgage, not just the monthly payment.

EXPLORE YOUR OPTIONS

Could Refinancing Make Sense for You?

Every mortgage and financial situation is different. An Impact Loans mortgage professional can help you explore available refinancing options and understand how a new loan may fit your goals.

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This content is provided for general educational purposes only and is not financial or lending advice. Loan programs, rates, qualification requirements, closing costs, available equity, and potential savings vary based on individual circumstances.

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