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When is the Right Time to Refinance?

One question I get a lot is: when should I refinance my home? The answer isn't quite so simple and the best time to refinance for you, personally, depends on several factors, including the current interest rates, your financial goals, and your individual circumstances. Here are some situations when refinancing may be advantageous:

  1. Lower interest rates: If interest rates have significantly dropped since you obtained your original loan, refinancing can help you secure a new loan at a lower rate, potentially reducing your monthly payments and overall interest costs.

  2. Improved credit score: If your credit score has improved since you first obtained your loan, you may qualify for better interest rates and loan terms. Refinancing at this point can be beneficial in lowering your interest rate and saving money.

  3. Change in financial situation: If your financial circumstances have changed positively, such as an increase in income or a decrease in debt, you may be eligible for more favorable loan terms when refinancing.

  4. Shortening the loan term: Refinancing can also be a good idea if you want to shorten the term of your loan. By refinancing from a 30-year mortgage to a 15-year mortgage, for example, you may pay off your loan faster and save on interest payments in the long run.

  5. Switching loan types: Refinancing allows you to change your loan type. For instance, if you currently have an adjustable-rate mortgage (ARM) and want to switch to a fixed-rate mortgage to secure a more predictable interest rate, refinancing can facilitate that change. You can also refinance from a FHA loan to a conventional to stop paying mortgage insurance.

  6. Accessing equity: If you have built up equity in your home and need funds for major expenses like home renovations, education, or debt consolidation, you can refinance your mortgage and take out a cash-out refinance loan, using the equity as a source of cash.

The decision to refinance should consider other factors such as: closing costs, loan terms, and how long you plan to stay in the home. It's crucial to compare rates and terms from different lenders to ensure you're getting the best deal possible.

Your home is more than just a place to live—it's a valuable asset that can empower you to achieve your dreams. Let us help you unlock its full potential through the power of refinancing. If you have further questions on the different reasons and types of refinances, let's get on a call and find if a refi is right for you.

Caleb Shifflett

Loan Officer


Cell: 940-456-0513

LocalLender Empowered By NEXA Mortgage, LLC

Equal Housing Lender logo

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