Question 1

When should I refinance my mortgage?

Accepted Answer

Refinancing makes sense when you can lower your interest rate by at least 0.5–1%, you plan to stay in the home long enough to recoup closing costs, or you want to change your loan term.

Question 2

How long does it take to break even after refinancing?

Accepted Answer

The break-even point is your closing costs divided by monthly savings. If costs are $4,000 and you save $200/month, you break even in 20 months. Staying longer makes refinancing worthwhile.

Question 3

How much does it cost to refinance a mortgage?

Accepted Answer

Refinancing typically costs 2–5% of your loan amount in closing costs. On a $300,000 mortgage, that's $6,000–$15,000 in fees paid upfront or rolled into the new loan.

Question 4

Does refinancing hurt your credit score?

Accepted Answer

Refinancing causes a small, temporary dip in your credit score due to the hard inquiry. The impact is usually 5–10 points and recovers within a few months of on-time payments.

Question 5

Should I refinance to a 15-year or 30-year mortgage?

Accepted Answer

A 15-year mortgage saves significantly on total interest but has higher monthly payments. A 30-year refinance lowers monthly payments but costs more over the life of the loan.

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