When interest rates suddenly fall or there’s a change in your financial circumstances, many homeowners will consider refinancing their mortgage. Refinancing is actually replacing your current mortgage will a brand new loan. In doing this, expect to go through a mortgage application process similar to what you experienced with your original mortgage. Refinancing can often be a sound financial choice that can allow you to meet a variety of your financial needs:

1. With lower interest rates you can reduce your monthly payments
2. Shortening the term of your loan or reduce interest cost over the life of your mortgage by refinancing with a lower interest rate.
3. Reduce the interest rate risk by switching from adjustable-rate or balloon mortgage to a fixed-rate loan.
4. Free up your equity for a large expenses or debt consolidation.

Although, the above might make refinancing seem like an easy decision, consider the following before making your final decision:

1. Current interest rate vs. new potential rate
2. Closing Cost
3. How long you plan to stay in your home
4. How the refinance will support your overall financial goals

Use the calculator to determine how long it will take you to breakeven on a mortgage refinance?