Refinance when the numbers work for you
I work out your new payment, the costs and your break-even month first. If it doesn’t pay off yet, I’ll tell you and keep an eye on rates for you.
NMLS 2797128 5.0/5 from 21,774 Google reviews of Loan Factory
How long until a refinance breaks even?
- Break-even
- —
- Total interest difference
- —
Illustration only. Not a quote or a commitment to lend.
What do you want the refinance to do?
Lower your payment or shorten the term
Rate-and-term refinance: move to a lower rate, change the term, or switch from an adjustable rate (ARM) to a fixed rate.
Take cash out
Cash-out refinance: replace your current loan with a larger one and take the difference to remodel, pay off credit cards or open a business.
Keep your loan, open a credit line
HELOC: a credit line secured by your home that you draw on when you need it. A good fit when your current loan has a low rate you want to keep.
Have an FHA or VA loan
FHA Streamline and VA IRRRL: less paperwork, and often no new appraisal.
When refinancing makes sense, and when it doesn’t
A good fit when
- You will stay in the home past the break-even point
- The monthly savings are large compared with the closing costs
- You want to move from an adjustable rate (ARM) to a fixed rate before it adjusts
- Your home has gained enough value to drop mortgage insurance
Not yet when
- You might sell or move before you break even
- You have paid the loan down for years: restarting the term can raise the total interest even if the payment drops
- The cash-out goes to everyday spending: short-term debt becomes debt secured by your home
- You are offered a “no-cost refinance”: the cost is usually built into a higher rate
When the numbers don’t work yet, I’ll say so and watch rates for you. Refinancing at the wrong time can mean paying closing costs twice.
HELOC or cash-out refinance
| HELOC | Cash-out refinance | |
|---|---|---|
| Your current loan | Stays as is, including the rate | Replaced by a new loan at a new rate |
| Rate | Usually variable | Usually fixed |
| How you get the money | Draw as needed, pay interest only on what you use | One lump sum |
| Best when | Your current rate is low and you need money in stages, like a remodel | You need one large amount and the new rate is not much higher than your current one |
Both are secured by your home. If the goal is to pay off credit cards, make sure the cards stay paid off, or you end up with both debts.
What clients say about Loan Factory
Working with Roberta Fulford on my mortgage refinance was a great experience. They were professional, responsive, and took the time to explain everything clearly throughout the process. They helped me find a refinancing option that worked well for my situation and made the entire experience smooth and stress-free. I would highly recommend them to anyone looking for a knowledgeable and reliable loan broker. Thank you Loan Factory Team!
Ryan Domingo and Max Le helped me with my loan refinance. They are very kind and patient with me and made the whole process much easier. Other lenders do not pick up the phone once you start the process but these guys always pick up and help me. I really appreciate them for all their help. I recommend Max Le for (adjuster) and Ryan Domingo (loan officer).
I recently completed a refinance and had an excellent experience working with Bi and Nami. Bi, the loan officer, was consistently available to answer every question with clarity and patience. Nami, the processor, provided timely follow-ups and kept the entire process moving smoothly with her quick turnaround. Their teamwork, communication, and commitment made the refinance efficient and stress-free. I truly appreciate their professionalism and support throughout the transaction.
Google reviews of Loan Factory, the company I work with: 21,774 reviews, 5.0 average.
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Loan Factory figures, from loanfactory.com.
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Common questions
How far do rates need to drop before I refinance?
There’s no single number. What matters is whether you’ll stay in the home longer than the break-even period. The calculator above works out exactly that.
What if I’m not ready yet?
Send me your details and the rate you’re waiting for. When the market gets close, I’ll call you with how much you’d save.
Does a refinance cost money?
Yes, there are closing costs, similar to when you bought. Some options roll the costs into the loan or trade them for a slightly higher rate. I list every cost before you decide.