Refinancing is not automatically a good idea
Nobody should refinance because somebody called and told them they could. Start with what you are trying to accomplish.
- No application required
- No credit pull to talk
How do I know whether refinancing is worth it?
If you are making a change to your mortgage and there are costs involved, how long does it take before the benefit of that change has made up for those costs? That is break-even.
Then the bigger question. Are you even likely to be in the home, or in the mortgage, long enough for that to matter?
Nobody should refinance because somebody called and told them they could. What is the goal, what does it cost, how long do you expect to keep the mortgage, and what actually changes. If the answer does not make sense, do not do it.
How long until the change pays for itself?
How long until the change pays for itself?
Break-even is simple. If a change to your mortgage has costs, how long does it take before the benefit has made up for them? The bigger question is whether you are likely to keep the mortgage that long. Enter your own numbers, nothing is sent anywhere.
months to break even
Talk it through with SamanthaThis is arithmetic on numbers you entered. It is not a quote, an offer, a credit decision or a recommendation, and it does not evaluate your eligibility for any loan program. Align Lending LLC, NMLS #2041154. Equal Housing Opportunity.
Sometimes the answer is do nothing
Sometimes the best mortgage advice anyone can give you is that you should not change anything. That is a real answer and we will give it.
And lowering a payment is not the only reason people refinance. Sometimes somebody is changing the structure of their mortgage. Sometimes they are accessing equity. Sometimes their life changed. Which is why will my payment go down is not the only question worth asking.
Whether the change you are considering actually accomplishes what you want.
What you are trying to accomplish. What the change would cost. How long you expect to keep the mortgage. What actually changes as a result. And whether the answer still makes sense once all of that sits next to each other.
The question underneath the question
What reasons have nothing to do with the payment?
Sometimes somebody is changing the structure of their mortgage. Sometimes they are accessing equity. Sometimes their life changed. Sometimes they are trying to accomplish something completely different financially.
Which is why will my payment go down is not the only refinance question, and treating it as the only question is how people end up making a change that looks fine on one line and does nothing for what they actually cared about.
Start with the goal. The structure that fits becomes much easier to see once the goal is on the table.
When is refinancing genuinely not worth it?
When the reason does not make sense after you look at the whole picture.
Nobody should refinance just because somebody called them and told them they could. What is the goal. What does it cost. How long do you expect to keep the mortgage. What changes. If the answers do not add up, do not do it.
Sometimes the most useful mortgage advice is that you should not change anything right now. That is a real answer, and it is one you are allowed to leave a conversation with.
Tell us what you are trying to do
- Tell us what you are trying to do - Not what product you want. What you are actually trying to accomplish.
We look at your situation
- We look at your situation - A licensed Align loan officer works out what matters most for you specifically.
You leave with a plan
- You leave with a plan - Your options, the tradeoffs, and your next step. No obligation to go further.
Questions people actually ask
How long do I realistically expect to keep this mortgage?
That is the question underneath break-even, and it moves the answer more than almost anything else. A change that makes sense over a long horizon can make very little sense over a short one, and the costs do not care which one you are in.
What is break-even in plain terms?
How long it takes for the benefit of the change to make up for what the change cost you.
What if I move in two years?
Then the time horizon matters more than anything else, and it may be the reason not to do it.
Does a lower payment always mean it is worth it?
No. A lower payment can still be the wrong move depending on what it cost and how long you keep it.
Somebody called me about refinancing. Should I listen?
Ask them what the goal is and what it costs. If they cannot answer both clearly, that tells you something.
Can refinancing do anything besides lower a payment?
Yes. Changing the structure, accessing equity, or responding to a change in your situation are all real reasons.
How do you explain break-even without making it a math class?
If you are making a change to your mortgage and there are costs involved, how long does it take before the benefit of that change has made up for those costs. That is the idea. The bigger question is whether you are even likely to be in the home or the mortgage long enough for that to matter.
What if I am not sure how long I am staying?
That is worth saying out loud, because it changes the answer more than almost anything else. A change that makes sense over a long horizon can make very little sense over a short one.
Is it worth reviewing even if I do nothing?
Yes. Knowing where you stand and deciding to leave it alone is a legitimate outcome, and it is a better place to be than wondering.
Align Lending LLC, NMLS #2041154. Samantha Shelton, NMLS 1647301. Equal Housing Opportunity. Licensed in Michigan, Ohio, North Carolina, Florida, Louisiana and Texas. This page is for educational purposes only. It is not a credit decision, a preapproval, a commitment to lend, or an offer of credit, and it does not evaluate your eligibility for any loan program.
