Refinancing Myths & The
Truth Behind Them

It’s been a few years since you purchased your home, and a lot can change in that time: home values, interest rates, and even your financial goals. If you haven’t revisited your mortgage recently, now might be a great time to take another look at a refinance, since:

​

• Your home may have gained value, increasing your equity

• Your credit score may have improved

• You may be able to remove mortgage insurance

• New loan options or strategies may now be available

• Your financial goals may have shifted (debt payoff, lower payment, cash access)

Let’s clear up a few common refinancing myths so you can make an informed decision.

​

Myth: Rates are higher now than what I have, so refinancing doesn’t make sense.

Reality: Even if rates are higher than when you purchased, refinancing can still make sense depending on your goals, especially if you're looking to eliminate mortgage insurance, access equity, or restructure your loan.

​

Myth: If you’ve been denied a refinance in the past, you can’t ever be approved again.

Reality: Many denials are due to low equity or low credit scores, but with rising home values and improved credit, your situation may have changed. If so, now could be a great time to reapply.

​

Myth: Closing costs are expensive.

Reality: Closing costs don’t always have to come out of pocket. Depending on the loan, you may be able to roll costs into the loan. We’ll walk through the options so you can choose what makes the most financial sense.

​

Myth: A minimum of 20% in home equity is required to refinance.

Reality: You don’t need 20% equity to refinance, it’s a guideline, not a rule. While less than 20% may require mortgage insurance, you can still qualify. Just make sure the savings outweigh the added cost.

​

Myth: Refinancing won’t really save that much.

Reality: Depending on the change in interest rate, refinancing could save a good amount on interest. For example, lowering your current interest rate by even just half a point could save you tens of thousands of dollars over your full loan term. It could also help you consolidate high-interest debt or access equity for home improvements or other goals.

​

Ready to see what refinancing could look like for you? Reach out!