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Frequently Asked Questions
What are the benefits of refinancing?
Refinancing can help you lower your interest rate, reduce your monthly payment, or access cash for things like home improvements. It also gives you the flexibility to adjust your loan term.
What is mortgage refinancing?
Refinancing involves replacing your existing mortgage with a new one, typically to secure better terms or access home equity.
What are the costs associated with refinancing?
Refinancing can involve fees such as application fees, appraisal costs, and closing costs. It’s essential to weigh these expenses against potential savings.
How does my credit score affect refinancing?
A higher credit score can lead to more favorable loan terms and interest rates. Lenders assess creditworthiness during the refinancing process.
What is a cash-out refinance?
This option allows homeowners to refinance for more than the current mortgage balance and receive the difference in cash, often used for home improvements or debt consolidation.
How does refinancing affect my taxes?
Interest paid on a refinanced mortgage may be tax-deductible, but it’s advisable to consult a tax professional for personalized advice.
When should I refinance my mortgage?
Homeowners often consider refinancing to obtain a lower interest rate, reduce monthly payments, change the loan term, or switch from an adjustable-rate to a fixed-rate mortgage.
Can I refinance with bad credit?
While challenging, some lenders offer refinancing options for those with less-than-perfect credit, though terms may be less favorable.
1: Define Your Refinance Goals
Example goals: Reduce payment, shorten term, eliminate PMI, cash-out for renovations or debt.
2: Review Your Current Mortgage
Tip: Grab your most recent mortgage statement to get started.
3: Apply for the New Loan
We’ll gather information like your income, credit score, and home value to find the best loan options available.
4: Appraisal and Underwriting
Depending on your loan type, an appraisal may be required to confirm the home’s current value.
5: Close on Your New Loan
Once approved, you’ll sign your new loan documents, and the old mortgage will be paid off.
6: Enjoy Your Benefits
That’s it! Start enjoying your new lower payment, shorter loan term, or the cash you pulled out.
Watch this quick video for expert insights on when it makes sense.
