Should I Refinance?

Since interest rates are still historically low, now might be a good time to reassess your current mortgage to determine whether you would benefit from a refinance. Here are some factors to consider when deciding if you should refinance your home loan.

Refinancing would probably be a good idea if you want to:

  • Refinance from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage to secure a stable interest rate and monthly payment.
  • Change to a shorter-term loan to pay off your mortgage faster (example: 15-year note instead of 30-year).
  • Secure a lower mortgage rate and a lower monthly payment.
  • Reduce your interest rate because it is higher than what is now available.
  • Make a higher monthly payment on a shorter-term mortgage so you can pay off the loan and build equity more quickly.
  • Extend your current loan term to lower your monthly mortgage payment.

Here are some things to consider before you refinance:

  • By refinancing you’ll have to go through the loan approval process again, just like you did when you purchased the home. Your debt-to-income ratio and credit score will have to be re-evaluated.
  • By refinancing you will have to pay the closing costs, appraisal, credit report and other fees.
  • You’ll need to have at least 10 to 15% equity in your home to have an easier time qualifying for a new loan.
  • If you have less than 20% equity in your home when refinancing you will be required to pay private mortgage insurance (PMI).
  • By refinancing to pay less interest, your tax deduction may be lower.*

* PrimeLending is not authorized to give tax advice. Please consult your tax professional for tax advice for your specific situation.

All loans subject to credit approval. Rates and fees subject to change. Mortgage financing provided by PrimeLending, a PlainsCapital Company (NMLS: 13649). Equal Housing Lender. © 2013 PrimeLending, a PlainsCapital Company. For full licensing and disclosure information, visit

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