Refinance Smarter, Not Harder

Let’s talk about refinancing. It’s a word that scares some, excites others, and leaves the rest of us Googling to learn more.

Remember when you first bought your home? You probably spent more time than you ever wanted talking about escrow, loan terms, and appraisals—big adult words that made your head spin.

And after signing your name roughly 147 times (possibly with hand cramps), you officially became a homeowner. Exciting? Absolutely. Slightly terrifying? Also, yes.

Then came the aftershock: that moment when you realized how much money you just spent. That’s when the word “refinancing” started to creep into your brain. Maybe it came up on a podcast. Maybe a friend mentioned it. Maybe you’re just in your DIY Home Reno era and want some extra cash for upgrades.

No matter how you heard about it, let’s talk about what it actually is, and whether it’s worth your time.

What is Refinancing, Really?

Refinancing means replacing your current mortgage with a new one. It’s that simple. But there are things to consider.

It’s important to remember that not every glittery refinancing offer leads to a pot of gold. Sometimes it’s best to stay put, but how can you know for sure?

When Does Refinancing Make Sense?

Here are some common reasons people refinance:

• To lower their interest rate
• To lower their payment
• To change their loan term
• To remove PMI (convert to a conventional loan)
• To tap into equity (cash-out refinance)

Even if just one, or all, of these apply to you, it doesn’t automatically mean refinancing is the right financial move. These are just conversation starters to bring up with your lender.

Before You Refinance: Ask Yourself the Real Questions

Asking yourself the following questions can help you determine if this is a smart move:

• Will it make your interest rate meaningfully lower (at least .75-1%)?
• Do you have enough equity in your home (ideally 20%)?
• Will the long-term savings outweigh the closing costs?
• Are you planning on staying in your current home for 2-3 years or longer?
• Is your credit strong enough to get a better deal?

And yes, closing costs are back. Those aren’t just for purchase loans. The fees you might’ve sweet-talked the seller into covering the first time around? They’re your responsibility now. Because refinancing means essentially going through the mortgage process again, minus the house hunting, moving stress, and pretending you understand what “escrow” means.

Oh, and keep in mind: when you refinance, you’re resetting your loan term. This can help in some cases and hurt in others. For example, if you’re 7 years into a 30-year mortgage and refinance into another 30-year loan, you’re starting that clock all over again. This might make sense if you want some extra cash for that home improvement project, but you need to consider the pros and cons. Seven more years of mortgage equals seven more years of interest too.

In other cases, you can refinance into a shorter loan term. This may increase your monthly payment, but the total interest paid will drop significantly.

It’s important to know your end goal. Lower interest? Lower payment? Pay off sooner? Cash out? Each of those goals will result in a slightly different process.

So, Should You Refinance…

If:

• You’re saving on interest
• You have solid equity
• The cost/benefit analysis for closing cost is in your favor
• You’re staying put for at least 2-3 years
• Your credit score can unlock a better deal…

…then refinancing could be a smart, strategic move.

One more perk? If you’re tired of your mortgage getting passed around like a hot potato, refinancing with a local lender like Crane Credit Union means your mortgage could stay right here, with real people you know and trust.

Our mortgage team is here to walk you through the process and help you decide if refinancing fits your goals. Whether you’re upgrading your kitchen, consolidating debt, or just want to feel like a savvy adult who knows what escrow means, we’ve got your back. Contact us today and let us start helping you make your mortgage work for you.