Zephyr Hill

A Family Blog

  • Home
  • NAME YOUR BABY
  • About / Contact
  • Terms/Privacy
  • Homeschooling
  • Faith & Family
  • Book Reviews
  • Pets
  • Cloth Diapers

Consider These Things Before Refinancing Your Home

September 29, 2022 by Anne Marie 8 Comments

Spread it around!

As costs continue to rise across the board, consumers are looking for more ways to save money and cut corners. One of first places we look is at our mortgage, because it’s generally the highest outlay of the month. We see advertisements about how refinancing can save us thousands of dollars. But is it the right decision for you?

What is a Refinance?

When you get a refinance (or remortgage), you actually sign completely new loan papers. Some of the terms that might change include:

  • Lower monthly payments
  • Lower interest rate
  • Change in loan terms (for example, switching from 15 years to 30 or vice versa)
  • Change in type of loan

Should I Refinance?

Not everyone will benefit from a refinance. But if you pick the right time, you can reap a lot of benefits! For instance:

  • You can lower your monthly payments and use the extra cash to meet monthly expenses and/or put together an emergency fund
  • You can change an ARM or balloon mortgage to a more beneficial fixed-rate mortgage
  • You can score a lower interest rate; to make it worthwhile, you’ll need to save at least 1 or 2 percentage points.

Always shoot for a 15-year fixed if you can; you’ll pay off your house sooner and save a TON because you’ll be skipping 10+ years of interest payments!

It really pays to shop around for interest rates because just one or two percentage points makes a HUGE difference. Here’s an example:

  • Total interest on a 15-year fixed-rate mortgage of $250,000 is $117,687 at 5.5% and $82,860 at 4.0%. That’s over $34,000 in savings.

Counting the Cost

Don’t forget that refinancing costs money; after all, you’re closing on a new loan and that means closing costs. You can check here to get an idea of current estimates. Shop local and online banks because they do compete in terms of closing costs and services.

Getting an idea of what your remortgage will look like starts with calculating your payments using an online tool. The repayment of your loan over a period of time is called amortization and you can create printable amortization schedules to get a visual of what your new payment terms would look like going forward.

To calculate your remortgage, just plug in these numbers:

  • Current loan balance
  • Cash/equity (if any) that you will withdrawal
  • Interest rate
  • Term (choose the number of years you’ll spread the payments over – generally 10, 15, 25 or 30)

What are the First Steps?

If, after running the numbers, it looks like a win for your home, the first things you’ll do on your way to a refinance are:

  • Get your home appraised to determine fair market value
  • Gather required documents for the application like proof of income, ID, tax returns, bank and mortgage statements, homeowners insurance and property tax bills.
  • Decide whether you will be paying for closing costs up front or “rolling” them into your new loan (if the bank offers this option).

In summary, only you can determine if refinancing is a good idea right now. It depends on your situation, and I hope the tips I’ve shared today help you in that decision-making process.

Filed Under: Faith and Family Tagged With: benefits of refinancing, current interest rates, Mortgage calculator, Refi pros and cons, Should I refinance

About Anne Marie

I'm the creator of Zephyr Hill Blog, where families can find help with child rearing, homeschooling and hobby farming. Be sure to check out my huge database of cloth diaper reviews. There's also a shopping guide to help you find the best deals!

Comments

  1. Jamie says

    September 30, 2022 at 6:33 pm

    Great information. We jumped on the chance to refi before it went over the hill. So glad that we did. 🙂

    Reply
  2. Laura says

    October 14, 2022 at 4:28 pm

    The more we know, the wiser our choices we make could be. Awesome post answered all my questions.

    Reply
  3. Sheila says

    July 3, 2023 at 2:16 am

    I really enjoyed your post. Thanks for sharing these resources as we’re on the fence about a re-fi right now

    Reply
  4. Shopistandigital61 says

    July 4, 2023 at 1:43 am

    Great site. Love to follow. Keep it up!

    Reply
  5. Kirana says

    July 12, 2023 at 3:29 am

    Great information. We jumped at the chance to refinance before it was too late, and we’re glad we did!

    Reply
  6. Stan says

    July 19, 2023 at 12:25 am

    We jumped at the chance to refinance before it was too late, and we’re glad we did. For us, the pros far outweighed the cons

    Reply
  7. Salli says

    July 25, 2023 at 3:00 am

    This helped me make a decision against refi – didn’t realize all the hidden costs!!

    Reply
  8. Sherri says

    July 27, 2023 at 4:49 am

    Lots to consider! For me, the kicker is terrible interest rates right now. We’re going to wait to refi

    Reply

Leave a Reply to Sherri Cancel reply

Your email address will not be published. Required fields are marked *

Hot off the Press

  • 7 Classic Jewelry Gift Ideas for Mother’s Day
  • Resources for Teens Who are Considering Flight School
  • NEW Book Review (Louis of Granada)

Popular Posts

100+ Ways to Name Your Boy or Girl After Mary, the Mother of God
How to Name Your Farm or Ranch
10 Tools That Make Homeschooling Easier
Educational Games You Can Enjoy With Your Children
Naming Your Business or Product

Newsletter

Fill in the form below to be notified when new content is published at Zephyr Hill!
Sender.net email marketing

Find Posts About:

  • Book Reviews (22)
  • Cloth Diaper Reviews (173)
  • Cloth Diapers (62)
  • Faith and Family (146)
  • Food and Drink (22)
  • Giveaways (179)
  • History (4)
  • Hobby Farming (9)
  • Home and Family Reviews (82)
  • Homeschooling (53)
  • Names (10)
  • Pets (23)
  • Small Business Resources (6)

Search my Blog:

Copyright © 2025 · Zephyr Hill Blog · Design by Albemarle PR

Copyright © 2025 · Albemarle PR - Hannah Template on Genesis Framework · WordPress · Log in