With mortgage rates currently near 2017 lows* and not too far from all-time U.S. historic lows, it’s worth asking if now is the right time to refinance your mortgage. Since favorable rates like today’s may not be available in several months or years, now may be a good time for many people to refinance. Nonetheless, the availability of low mortgage rates is just one factor that should be considered when determining if a refinance is right for you. Here’s how refinances work and how you can decide if now is the time for you to refinance. 


How does it work?


Refinancing a mortgage involves obtaining a new loan with new terms to replace the current mortgage on your home. This can provide the opportunity to secure a lower interest rate, switch between a fixed or adjustable rate, obtain a shorter (or longer) mortgage term, take equity out of your home or obtain other benefits.


Is it a good idea?


The goal of refinancing is always to come out ahead overall. This usually means saving money on the total cost of your home financing, though sometimes a more expensive mortgage is desirable if it means smaller monthly payments, the chance to take out equity or making other favorable changes. To determine if refinancing is right for you, you’ll need to decide what you want from a new mortgage, then work with a loan officer to compare your current loan to suitable new financing that’s available.


Is refinancing for everyone?


Refinancing may not be available or may not be the best choice for everyone. Whether you qualify for a refinance will depend on how recently you obtained your current mortgage, how much equity you have in your home and which lender you approach for your new loan. You’ll also need to meet the credit score, income and other requirements that apply to all mortgage applicants. Even if you can refinance, if you plan to sell your home soon or are close to paying off your mortgage, refinancing may not be worth the closing costs.




If all this sounds a bit complicated, it’s because it often is. No two people’s mortgages, financial situations and available options are the same, and the mortgage world is ever-changing. Be sure to contact your mortgage loan officer to determine your best course of action as they’ll be happy to examine your situation and present you with today’s options. The current great rates may not be available for much longer, so you may be glad you decided to look into a refinance sooner rather than later.


*As of September 19, 2017