Refinancing a Mortgage: How It Works and When It Makes Sense
- By Jim Blackburn
- on
- Buy A House, Cash-Out Refinance, Current Mortgage Rates, FHA Refinance Loans, First-Time Home Buyer
1. Apply for a New Loan, Just Like You Did the First Time
Refinancing starts with a new mortgage application. You’ll provide updated financial information—like pay stubs, tax returns, and credit history—just as you did for your original loan. The lender will also order a home appraisal to confirm your property’s current value.
Before you apply, explore your refinancing options using our refinance calculators to see whether a rate reduction, cash-out, or term change makes the most sense for your situation.
2. Your New Loan Pays Off the Old One
Once approved, your new loan is used to pay off your existing mortgage in full. From that point forward, you only make payments on the new loan—ideally at a lower interest rate, a shorter term, or better terms that align with your current goals.
Use our Conventional Refinance calculator to see how a lower rate could reduce your monthly payment, or explore an FHA Streamline Refinance if you currently have an FHA loan.
3. Enjoy the Benefits—If the Math Works
Refinancing can help you:
- Lower your monthly payment
- Shorten your loan term
- Switch from an ARM to a fixed-rate
- Tap into equity with cash-out refinancing
Just be sure to factor in closing costs and compare the total savings over time. Refinancing should move you closer to financial freedom—not farther away.
Compare different scenarios with our Conventional Cash-Out Refinance calculator to see if tapping equity makes sense, or use the Compare 2 Rates tool to see total interest savings over the life of the loan.
Want to Know If Refinancing Could Save You Money?
Refinancing can lower your payment, shorten your term, or unlock equity—but only if the numbers work. Here’s how to find out:
📉 Use the Conventional Refinance calculator to see how much you could save monthly with today’s rates
💰 Explore the Conventional Cash-Out Refinance to see how much equity you could access for home improvements, debt consolidation, or investments
⚡ Check if you qualify for an FHA Streamline Refinance for a faster, easier refinance with less documentation
📊 Compare total interest costs with our Compare 2 Rates tool to see the real long-term impact of refinancing
Ready to Take Your First Step?
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